Which one would you invest in?
You are considering three stocks for investment purposes. The required return (rj) on the market
portfolio is 14%, and the riskless return is 9%. On the basis of the information that follows, in
which (if any) of the below stocks should you invest?
Stock Beta Current Price Last Dividend Growth Rate
A 1.3 $15.00 $1.20 5.00%
B 0.9 $28.00 $1.30 10.00%
C 1.1 $31.00 $2.40 8.00%