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Russell Corporation gave cash dividends of $10 per share last year. It gave 50% of its profits as cash dividends and its ROE was 20%.

Russell Corporation gave cash dividends of $10 per share last year. It gave 50% of its profits as cash dividends and its ROE was 20%. The expected ROR from the stock market as a whole is 12%, the risk-free rate is 7% and the beta of this companys share is 1.2. It is currently trading in the market at $150 per share. Would you buy this share?

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