Jessica, Linda, and Wayne co-manage a large global equity portfolio. They are researching Google (GOOGL) , as of January 1, 2016. The current stock price is $200. The most recent quarterly dividend was $0.50 per share. Over the coming year, one more quarterly dividend of $0.50 is expected, followed by three quarterly dividends of $0.85. Using the CAPM, Jessica and Wayne estimate that GOOGLs required rate of return is 5 percent. They have set a one-year target price for GOOGL of $315. Ignoring returns from reinvesting quarterly dividends: SHOW YOUR WORK

A. What is their one-year expected return?

B. What is the target price that is MOST consistent with GOOGL being fairly valued as of January 1, 2016?