Q1. (a) Karas's dividends are expected to grow at the rate of 12% a year for the next 4 years and then to level out at 9% a year and currently paid its stockholders an annual dividend of $3 a share. So far, you have learned that the stock has a beta of 1.80, the risk-free rate of return is 6%, and the expected return on the market is 11%. Using the Capital Asset Pricing Model (CAPM) to find the required rate of return and put a value on this stock. (8 marks)