Question: Data Set EPS = $3 ; ROE = 25% ; plowback = 90% ; R(f) = 2% ; R(m) = 9% ; MRP = 7%

Data Set

EPS = $3 ; ROE = 25% ; plowback = 90% ; R(f) = 2% ; R(m) = 9% ; MRP = 7% ( R(m) - R(f) ) ; Intrinsic Value = $73.50

Today's Closing Price = $60 ; Current Dividend (D0) = 0.30 ; Rate of Return =23% ; Trailing P/E Multiples = 24.50; Forward P/E Multiples = 20

PVGO = 57.52 ; Investment = $700,000 ; Expected Return = 23% ; E-mini S&P Futures = 2800

Question: Solve for Alpha of the above investment using only 75% of R(m)?

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