You are considering the purchase one Cochlear Ltd share on 1 July 2016.

a) Use the Yahoo7 Finance website to find the beta for Cochlear.

b) You will need a proxy for return on the market. To get this, calculate the return on the ASX 200 index for the period from 1 July 2016 to 29 June 2017. Use the Yahoo7 Finance website to collect the ASX 200 data.

c) You will need a proxy for the risk free rate. Use the RBA website to find the return on a two year Government Bond on 1 July 2016.

d) Calculate the discount rate for your Cochlear share. Show your workings.

e) Use the ASX website to identify the payment date and amounts of the most recent two dividends.

f) You expect that dividends during your holding period will be the same as those you have received since you purchased the share. You will sell the share on 1 July 2018 and expect to receive $180 (ignore transaction costs). Using the discount rate you calculated earlier, what price would you have been willing to pay for your share? Show all workings for your calculations.

g) Use the Yahoo7 Finance website to find the market price for your Cochlear share at close of trading on 1 July 2016. Compare this with your calculated price for a share and decide if you would purchase the share on 1 July 2016 or not. Show all workings for your calculations.

h) Using a P/E multiple of 38 and the most recent annual earnings per share for Cochlear, calculate the price of your Cochlear share. Use the announcements section of the ASX website to locate the most recent annual report for Cochlear. Show all workings for your calculations.