Question: a) Risk free rate = 5%, market return = 12%, growth rate of the bank's dividend = 8%, current dividend per share distributed by the

a) Risk free rate = 5%, market return = 12%, growth rate of the bank's dividend = 8%, current dividend per share distributed by the bank = $4. What should be the beta of the stock if current price of the stock is $80? (3) b) Forecasted dividends per share of the bank for the next 3 years are given as follows - Year Dividend ($) 1 10 2 15 3 20 Stock price of the bank after 3 years = $100 & amp; required return = 12%. What should be the stock price of the bank at present. (2)
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