Please show all calculation manually by applying the formula, don't solve it on powerpoint.

Your client is closely following a publicly listed Australian company, however your client does not have the requisite skills to evaluate the company and, as such, has provided you with the following information. Your client indicates that the company is closely integrated with the Australian economy and that he is happy for you to use the rates of return for the Australian economy as a whole in the evaluation process.

You have researched the following returns and other characteristics for this company:

Australian Treasury bills currently pay a return of 3% p.a.

Australian stock market return over the same period has averaged 8% p.a.

Australian stock market standard deviation of returns is 13% p.a.

This companys beta is estimated at 1.10.

Historical returns and dividends (below).

Year Price Dividend

2010 $15.62 $0.00

2011 $12.77 $0.80

2012 $11.96 $0.00

2013 $14.08 $0.85

2014 $14.45 $0.00

2015 $15.82 $0.95

2016 $17.31 $0.00

2017 $24.01 $1.20

Using the above information, identify whether it is a good idea, for your client, to invest in this company. Explain your reasoning for your decision.