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Assume a major investment service has just guven Oasis Electronics its highest investment rating, along with a strong buy recommendation. As a result, you decide
Assume a major investment service has just guven Oasis Electronics its highest investment rating, along with a strong buy recommendation. As a result, you decide to take a look for yourself and to place a value on the company's stock. Here's what you find: This year Oasis paid its stockholders an annual dividend of $ a share, but because of its high rate of growth in earnings, its dividends are expected to grow at the rate of a year for the next four years and then to level out at a year. So far, you've learned that the stock has a beta of the riskfree rate of return is and the expected rate of return on the market is Using the CAPM to find the required rate of return, put a value on this stock.
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