CALCULATE the REQUIRED RATE OF RETURN % CALCULATE the EXPECTED RATE OF RETURN % CALCULATE THE EQUILIBRIUM STOCK PRICE $ IS THE STOCK PRICE OVER or UNDER VALUED? WHY? Problem FOUR RRF = 5.6500% Rm 12.9500% Beta = 1.05 CALCULATE REQUIRED RATE OF RETURN NEXT dividend = $7.56 GROWTH rate = 6.5000% MARKET PRICE = $124.59 . CALCULATE: the EXPECTED Rate of Return % CALCULATE: EQUILIBRIUM Stock PRICE $ DETERMINE: Is stock OVER or UNDER valued? and WHY? CALCULATE the REQUIRED RATE OF RETURN % CALCULATE the EXPECTED RATE OF RETURN % CALCULATE THE EQUILIBRIUM STOCK PRICE $ IS THE STOCK PRICE OVER or UNDER VALUED? WHY? Problem FOUR RRF = 5.6500% Rm 12.9500% Beta = 1.05 CALCULATE REQUIRED RATE OF RETURN NEXT dividend = $7.56 GROWTH rate = 6.5000% MARKET PRICE = $124.59 . CALCULATE: the EXPECTED Rate of Return % CALCULATE: EQUILIBRIUM Stock PRICE $ DETERMINE: Is stock OVER or UNDER valued? and WHY? CALCULATE the REQUIRED RATE OF RETURN % CALCULATE the EXPECTED RATE OF RETURN % CALCULATE THE EQUILIBRIUM STOCK PRICE $ IS THE STOCK PRICE OVER or UNDER VALUED? WHY? Problem FOUR RRF = 5.6500% Rm 12.9500% Beta = 1.05 CALCULATE REQUIRED RATE OF RETURN NEXT dividend = $7.56 GROWTH rate = 6.5000% MARKET PRICE = $124.59 . CALCULATE: the EXPECTED Rate of Return % CALCULATE: EQUILIBRIUM Stock PRICE $ DETERMINE: Is stock OVER or UNDER valued? and WHY?