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An investor is contemplating whether to invest in a stock which currently worth $100 per share today and pays a 3% annual dividend. The stock

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An investor is contemplating whether to invest in a stock which currently worth $100 per share today and pays a 3% annual dividend. The stock has a beta as compared to the market of 1.3, which is an indication that it is riskier than the market portfolio. Assume that the risk-free rate is 3.5% and the investor expects the market to rise in value by 8% per year. Calculate the CAPM (2 marks)

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