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3.1 The XYZ Company is registered on the stock market. The market return is 18% and the risk-free rate is 8%. The company has paid R 3 per share in dividend, and it has a constant growth of 5%. 3.1.1 Calculate the expected return of the XZY share (use the CAPM) (4) 3.1.2 What is the intrinsic value of the XZY share? (6) 3.2 The SAPS is planning to buy five new police cars in 4 years. The cars are expected to cost R185 000 each. What equal monthly payment must the SAPS deposit into a sinking fund at 6% interest compounded monthly to achieve its goal? (7) 3.3 What is the effective rate of interest on your credit card if the nominal rate is 18% per year, compounded monthly?

Please note the following : For question 3.1 THERE IS AN ERROR IN THIS QUESTION: PLEASE NOTE THE BETA IS MISSING USE THE BETA OF 1.2