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SAR companys ordinary shares are expected to pay $

1.7

per share in dividends in

4

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

7.9%

and the return of T-bonds is

4.2%.

a.What is the expected return of SARs shares according to the CAPM?

b.What is the implied price per share?

.

a. The expected return of SAR's share is

nothing%

(round

to 2

dp)

b. The implied price per share is

$nothing(round

to 2 dp)