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Assume that Robi has expected return for the market is 1 9 percent; standard deviation of market return is 2 3 percent; risk - free

Assume that Robi has expected return for the market is 19 percent; standard deviation of market return is 23 percent; risk-free rate is 4.75 percent and correlation between Robi stock and the market is 1.15. Calculate the beta and required return for Robi stock. If Robi pays 65% of earnings as dividend, currently per share earnings Tk.1.56 and dividend growth rate is 8.6%,whereas earnings will grow at 11% and market price Tk.34.80. Compare and contrast your findings of Robi price in two different stock valuation methods.

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