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SAR companys ordinary shares are expected to pay $ 1.1 per share in dividends in 3 years and after which the dividends are expected to
SAR companys ordinary shares are expected to pay $ 1.1 per share in dividends in 3 years and after which the dividends are expected to grow at 1% annually forever. Company ABC's shares have a beta of 1.7. The long-term return of ASX200 is 9.5% and the return of T-bonds is 3.4%.
a.What is the expected return of SARs shares according to the CAPM?
b.What is the implied price per share?
SAR company's ordinary shares are expected to pay $ 1.1 per share in dividends in 3 years and after which the dividends are expected to grow at 1% annually forever. Company ABC's shares have a beta of 1.7. The long-term return of ASX200 is 9.5% and the return of T-bonds is 3.4%. a. What is the expected return of SAR's shares according to the CAPM? b.What is the implied price per share? a. The expected return of SAR's share is % (round to 2 dp) b. The implied price per share is $ (round to 2 dp)Step by Step Solution
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