An analyst gathered the following information for a stock and market parameters: stock beta = 0.87 ; expected return on the Market = 11.38% ; expected return on T-bills = 2.28% ; current stock Price = $8.80 ; expected stock price in one year = $10.59 ; expected dividend payment next year = $3.00 . Calculate the required return and expected return for this stock.
a) Required Return :
b) Expected Return :