Assume youve generated the following information about the stock of Triple C: The companys latest dividend of RM2 a share is expected to grow rate at 8% for three years. years. After that, you think dividends will grow at a constant 5% rate.

1. Use the variable growth version of the dividend valuation model and a required return of 14% to find the value of the stock.

(15 marks)

2. Suppose the stocks current market price is actually RM30.00 Based on your analysis from part a), determine whether the stock is overvalued or undervalued.

(2 marks)

3. Explain the capital asset pricing model conceptually, mathematically, and graphically.

(8 marks)