7. Use the following information to decide if you would recommend your clients buy STU stock. The risk-free rate is 5%, the expected return of the market is 10%, and STU has a beta of 1.5. You believe STU will return 20% based on your analysis of the stock. (15 points)

8. Part-time Student Co. pays a $2 dividend and expects to continue to pay this amount for the foreseeable future. If the required return for this stock is 5% what should the price of it be? (8 points)

9. Use the following information to apply the constant growth model to determine the price of ASD stock. (12 points)

Dividend History

2016 $1.00

2017 1.07

2018 1.15

2019 1.23

2020 1.33

The required return for ASD is 15%.