Question: Varun, a financial analyst, has been approached by an equity investor to choose between shares of two listed companies in the graphite electrodes industry: Graphite India and HEG. Varun decides to fundamentally value the shares using the Dividend Discount Model. 3 Further, for estimating the required rate of return, Varun decides to use the capital asset pricing model (CAPM).

For this purpose, he has collected the following information: