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The risk-free return is expected to be 1% while the return on the market portfolio is forecasted at 13%. Lime Green Machines has a beta

The risk-free return is expected to be 1% while the return on the market portfolio is forecasted at 13%. Lime Green Machines has a beta of 1.21 and is expected to pay $1.30 in dividends next year. Dividends have grown at a constant rate over the last ten years from $0.91 to $1.30, and the dividend growth rate is expected to be retained in the future. Should the stock be purchased for $10.75? Why? Show all your work.

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