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You have until 1:55 PM to complete this assignment. Intro CMTronic has current earnings per share of $1.53, a stock price of $49.38, a return
You have until 1:55 PM to complete this assignment. Intro CMTronic has current earnings per share of $1.53, a stock price of $49.38, a return on equity of 7% and a beta of 1.7. The risk-free rate is 4% and the expected market risk premium is 4.5%. Part 1 Attempt 1/1 for 10 pts. What is the required rate of return for the company according to the CAPM? 9.001% Part 2 Attempt 1/1 for 10 pts. What growth rate of earnings (and dividends) is consistent with the company's return on equity and its policy of reinvesting 20% of earnings? .0140 Part 3 - Attempt 1/1 for 0 pts. What is the fair stock price using the constant-growth dividend model? 15.2 Incorrect Part 4 Attempt 1/1 for 10 pts. What growth rate of earnings is implied by the current stock price of $49.38? 3+ decimals Submit
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