An analyst gathered the following information for a stock and market parameters: stock beta = 1.203 ; expected return on the Market = 11.79% ; expected return on T-bills = 4.22% ; current stock Price = $7.32 ; expected stock price in one year = $14.07 ; expected dividend payment next year = $1.44 .
Calculate the required return and expected return for this stock.
a) Required Return :
b) Expected Return :