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You are forecasting the returns for Tamarisk Company, a plumbing supply company, which pays a current dividend of $11.10. The dividend is expected to grow

image text in transcribed You are forecasting the returns for Tamarisk Company, a plumbing supply company, which pays a current dividend of $11.10. The dividend is expected to grow at a rate of 4.1 percent. You have identified two public companies, Vaughn and Bramble, which appear to be comparable to Tamarisk. Vaughn has the same total risk as Tamarisk and a beta of 1.75. Bramble, in contrast, has a very different total risk but the same market risk as Tamarisk. Bramble's beta is 1.55 . The market risk premium is 5.05 percent and the risk-free rate is 1.55 percent. (a) Determine the required return for Tamarisk using the appropriate beta. (Round answer to 3 decimal places, e.g. 3.361\%.) Required return (b) Determine the price of Tamarisk. (Round answer to 2 decimal places, e.g. 125.61.) Price $ Attempts: 0 of 3 used Using multiple attempts will impact your score. 25% score reduction after attempt 1

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