the stock of wolowitz fashions inc has a beta coefficient of 3.0. wolowitz fashions pay out 40% of its earnings in dividends, and the latest earnings announced were $7.50 per share. dividends were just paid and are expected to be paid annually. you expect that wolowitz fashions will earn ROE of 25% per year on all reinvested earnings forever. assume the risk free rate of return if 4.5% and the expected rate of return on the market portfolio is 14%.

what is the required rate of return for wolowitz stock

What is the intrinsic value of a share of wolowitz?

If the market price of a share of wolowitz fashions, inc is currently $15 and you expect the market price to be equal to the intrinsic value one year from now, what is your expected 1-year holding period return on wolowitz stock?