Company X pays an annual cash return to shareholders of 40 cents per share and this is expected to continue in perpetuit

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answerhappygod
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Company X pays an annual cash return to shareholders of 40 cents per share and this is expected to continue in perpetuit

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Company X pays an annual cash return to shareholders of 40 cents per share and this is expected to continue in perpetuity. The risk-free rate of return is 6% and the current average market rate of return is 10%. Company X's coefficient is 1.1.
What is the expected return from Company X, and what would be the predicted market value of company's shares?
A. Expected return 14.4%, Predicted value 278 cents
B. Expected return 10.4%, Predicted value 385 cents
C. Expected return 10.6%, Predicted value 377 cents
D. Expected return 61%, Predicted value 66 cents
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