Question
RIO's company's ordinary shares are expected to pay $1.4 per share in dividends for 6 years and after which the dividends are expected to grow
RIO's company's ordinary shares are expected to pay $1.4 per share in dividends for 6 years and after which the dividends are expected to grow at
2% annually forever. RIO's shares have a beta of1.1.
The long-term return of ASX200 is 9.8%
and the market risk premium is 6%.
a.What is the expected return of RIO's shares according to the CAPM?
b.What is the implied price per share?
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Matlab An Introduction with Applications
Authors: Amos Gilat
5th edition
1118629868, 978-1118801802, 1118801806, 978-1118629864
