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Question 2 ( 1 3 marks ) Ms . Jane Tong is planning her early retirement. Currently, Jane has $ 1 0 , 0 0
Question marks Ms Jane Tong is planning her early retirement. Currently, Jane has $ in savings and plans to invest all the money into CBIC Corporation's shares. CBIC has just paid an annual dividend of $ per share. It is expected that the company's dividend will grow by per year for the next two years before settling at a constant per year indefinitely. CBIC has a beta of Given the riskfree interest rate is and the market risk premium is a Compute the required return on CBIC shares using CAPM. marksb What are the expected dividends DD and D for the following three years? marksc Given the required return in part a calculate the intrinsic value of one CBIC share. marksd How many shares of CBIC shares can Jane purchase today? marksN
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