financial markets

A Moving to another question will save this response. Question 1 of 22 >> Question 1 10 points Save Answer A stock is currently traded at 35 AED per share. The systematic risk of the stock is 1.8 and the market's return is 12%. Stock last dividend's is 2 AED per share and the growth rate of earnings is estimated at 9%. the risk-free is 10%. Question 1: Estimate the fair price of the stock (first, apply CAPM to estimate the required rate of return, and then Gordon model to estimate the fair price). Question 2: Do you buy the stock at the price of 40 AED per share if the risk-free is 10%? Explain your decision. Question 3: What is your total return if you would buy the stock at the current price and would sell it at its fair price? Please explain. Question 4: Do you think that the market for that stock is efficient for the particular time under study? Please explain. Question 5: Is it ethical to earn returns higher than market's return? Please explain