Banyan Energy most recently paid a dividend of $1.64 per common share. The shares currently trade at $27 per share. Its beta is 0.8. Long term Canadian government bonds yield 6% and the expected return on the market is 11%. a. If investors expect dividends to grow at a rate of 3% per year what rate of return do they expect on the stock? (3 Marks) b. Compare the expected return from (a) to Banyan's required return using CAPM. Is the market for Banyan Energy's shares in equilibrium? If not what should the equilibrium price be? (3 Marks) Banyan Energy's shares in equilibrium? If not what should the equilibrium price be? (3 Marks) c. If you expect dividends to grow at a 10% rate for four years and then grow at 3% thereafter, and if you decide to use the CAPM to determine the required return for Banyan, what should the share price be? (6 Marks) Format BI U