You are interested in speculative holdings which is currently trading at a market price of R4. 20 per share. You expect it to achieve earnings next year of R3420000 and project a dividend next year of R0.137 per share. The firm has 10 million shares in issue and you estimate that you would require a return of 12% on this investment. What position would you take on speculative holdings?

b =?

g =?

P(o) =?

Decision: