Required return=risk free rate+beta*(market rate-risk free rate)
=4+1.1*(16-4)
=17.2%
Required return=(D1/Current price)+Growth rate
0.172=(3/63)+Growth rate
Growth rate=0.172-(3/63)
=0.124380952
Expected price=$63*(1+Growth rate)
=63*(1+0.124380952)
=$70.84(Approx).
Assume that the risk-free rate of interest is 4% and the expected rate of return on...
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