Question 2 (6 marks)

John Smith, a security analyst, has been assigned to analyze China Mobile using the constant-dividend-growth model. Johnassumes that China Mobiles earnings and dividends will grow at a constant rate.

Identify, within the context of the constant-dividend-growth model, how each of the following factors would affect the P/E ratio.

a) Systematic Risk of China Mobile. (2 marks)

b) Estimated growth rate of earnings and dividends. (2 marks)

c) Interest rate (2 marks)

There's no data

Question 3 (6 marks)

a) What is systematic risk and unsystematic risk? (2 marks)

b) How to obtain Beta and Residual risk in CAMP ? explain with an example (4 marks)

Please don't use other people's answers, answer more details, thank you