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Angus Corporation paid a dividend of $1.25 per share last year. Dividends are expected to grow at a rate of 5% per year into the

Angus Corporation paid a dividend of $1.25 per share last year. Dividends are expected to grow at a rate of 5% per year into the foreseeable future. 1) Assume the current Treasury security rate is 4% and the average S&P 500 market return is 8%. ValueLine is reporting a beta of 1.35 for Angus. How much do you think a share of Angus stock is worth? 2) If Angus shares are currently selling for $35, what is the expected rate of return on the stock? Should you buy it? Explain.

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