As per CAPM, requires rate of return = risk free rate+beta*market risk premium
= 3.17% + 1.50*9.87%
= 17.975%
Value of stock is equal to the present value of all future dividends
= 2.52(1.2178)/(1.17975) + 2.52(1.2178)^2/(1.17975)^2 + 2.52(1.2178)^3/(1.17975)^3 + 2.52(1.2178)^4/(1.17975)^4 + 2.52(1.2178)^5/(1.17975)^5 + 2.52(1.2178)^5(1.0394)/(1.17975)^5(17.975%-3.94%)
=$35.75
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