PBL 3 Anh Co. is an Australian pyjama designer. The company has recently come out with an exciting new design which is allowing them to pay a dividend of $4 into perpetuity. Anh Co.'s beta is estimated to be 0.60. Assume that the risk-free rate is 5% and the return on the ASX200 is predicted to be 13%. (i) Calculate the expected return for Anh Co. (ii) Suppose that Anh Co. is currently selling on the market for $41. Would you decide to buy or sell stock in Anh Co.? (iii) Tran Co. has emerged as a competitior to Anh Co. and is currently pursuing a high-risk production strategy. Compared with Anh Co., would you expect Tran Co.'s beta to be higher or lower? (iv) If forecasts show that Anh Co. and Tran Co. will have identical earnings and dividend policies, would you expect the share price of Tran Co. to be higher or lower than that of Anh Co