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Expected return using dividend valuation model
Hello,
Here is the question: Tangshan China's stock is currnetly selling for $160.00 per share and the firm's dividends are expected to grow at 5% indefinietly. In addition, Tangshan China's most recent dividend was $5.50. The expected risk free rate of return is 3% the expected market return is 8% and Tangshan has a beta of 1.2. A. What is the expected rate of return based on the dividend vauation model? B. What is the required retun based on CAPM? C. Would Tangshan China be a good investment at this time? Explain. I would appreciate andy help you can give me. I have searched everywhere and cannot figure this out. Thanks! Elizabeth |
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