SAPPI sells for R40 a share. Its likely dividend pay-out and end-of-year price depends on the state of the economy at the end of the year as follows: State of the economy Share Price Dividend Recession R34.00 R0.50 Normal R43.00 R1.00 Boom R50.00 R2.00 Calculate the expected holding-period return and the standard deviation of the holding-period return. All three state of the economy are equally likely. (10) 1.2 Dove Ltd pays 40% of its earning in dividends and its latest earnings announced were R10 per share. The company expects to earn a return on equity (ROE) of 20% per year in all reinvested earning forever. Doves beta coefficient is 1.2, the risk free is 8% and the expected return on the market portfolio is 15%. 1.2.1 Calculate the intrinsic value of Doves share? (10) 1.2.2 If the market share price of Doves share is R100 and you expect the market price to be equal to the intrinsic value one from now, what is the your expected one-year holding-period return? (5)