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12 points Consider the following information regarding share A and B Share Current Expected price in one Beta price Expected dividend Vear 25 27 0.5

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12 points Consider the following information regarding share A and B Share Current Expected price in one Beta price Expected dividend Vear 25 27 0.5 0.5 B 40 42 0.5 1 Required: Fill in missing information Do not include symbols: R: S: %; t(tonnes): 1 (litres); m (millions) etc. However, if the answer is negative please include the negative sign e.g. -2 Decimals should be written as 6.25 not 6,25 Carry 2dp for all workings and final answer. if the risk-free rate is equal to 6%, and the market risk premium is 696, the estimated returns for share A and B are 9 96 and 12 respectively. The required rate of return for shares A and B respectively are 75 96 and 12 9. The alpha of share A is -1 96 therefore share Als The alpha of share is % therefore share B is

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