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(2marks) 5b You are considering the purchase of 100 ordinary shares of Lotus Ltd. The beta on the security is 1.65, and the current market

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(2marks) 5b You are considering the purchase of 100 ordinary shares of Lotus Ltd. The beta on the security is 1.65, and the current market premium is 5.6%. i. If the riskless rate of interest is currently 12%, what will your required rate of return be? (2 mark) ii. Given the rate of return computed in Q5bi.), and an expected ordinary share dividend at the end of the next period of $8.50 which is assumed to grow at 5% p.a. thereafter, estimate the value of an ordinary share in this company (2 mark

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