1. Answer the following four parts (a to d) on stock valuation: (5 Marks0
2. a; A stock that pays a dividend of Rs 100 in the first year. The dividend growth rate is 5% every year till perpetuity. The discount rate is 10%. What is the price of the stock?
3. b; If Beta of a stock is 1.2. The market return is 10%, Risk free rate is 5%. What is the expected return of the stock?
4. c:If the return of the stock is 8%. The beta is 0.8. Market return is 10%. What is the risk free rate in the market?
5. d:If the market return is 10%, the stock return is 15%. Risk free rate is 4%. What is the Beta of the stock?