What growth rate does the market expect for the stock

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Reference no: EM132038144

1. You plan to work for the next 39 years and earn 6.5% on your investments during your working years. In retirement, you expect to need $82,000 per year during each of your 25 years of retirement and (during this time) you expect to earn 6.4% on investments. How much do you need to invest at the end of each year (while working) to allow this to happen?

2. A stock with a beta of 1.6 is priced at $43.50 and just paid a dividend of $1.85. If the risk-free rate is 2% and the market risk premium is 7%, what growth rate does the market expect for the stock?

A. 8.58%

B. 5.51%

C. 8.94%

D. 5.75%

Reference no: EM132038144

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