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13. Covaccine is working on developing vaccines for the past few years. Covaccine has the following dividend history Year Dividend per share Recently paid 210
13. Covaccine is working on developing vaccines for the past few years. Covaccine has the following dividend history Year Dividend per share Recently paid 210 Bz Last year 190 Bz Two years ago 180 BZ Three years ago 160 Bz The rate of return required in this risk class is 25 per cent. Covaccine has developed the vaccine for COVID-19 and plans to launch it commercially. Assuming that the growth rate in future will be double of its historic growth rate, what is the value of one share? 14. Shares in Hot Tea and Cold Ice are perfectly negatively correlated. Share Expected Return Standard deviation (R) Hot Tea 18 12 Cold 12 6 Ice a. Calculate the expected return from a portfolio consisting of 25 percent of Hot tea and 75 percent of Cold Ice (1 mark) b. How would you allocate the fund to achieve a zero standard deviation (2 marks)
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