Consider each of the following:

• Derwent plc and Plym plc have shares with beta values of 0.5 and 1.2 respectively. The expected rate of return for Derwent plc investors is 9 per cent and the expected returns to the market are 12 per cent. 
• Johar plc has earnings per share of 0.80 and a constant annual dividend payout ratio of 25 per cent. Its equity shares have a beta of 1.2. The risk-free rate of return is 5 per cent and the market rate of return is 8 per cent. 
• Chamba plc has 50 million 0.50 ordinary shares in issue with a total market capitalisa- tion of 150 million. For the year just ended, after-tax profits were 20 million and are expected to rise by 25 per cent in the forthcoming year. Chamba plc has a constant dividend payout ratio of 40 per cent and intends to increase the dividend by 5 per cent per year for the foreseeable future.

Required:

(a) Calculate the cost of equity for:

(i) Plym plc 

(ii) Johar plc

(iii) Chamba plc.

(b) Calculate the predicted value of a share in Johar plc.