Suppose you are told that returns on Treasury Bills are currently at 5% and the market returns is 12%. The beta value for Cilly Bhd is 1.2.
a). What is expected required rate of return on investment for Cilly Bhd?
b). If Cilly Bhd is forecast to pay next year's dividends of RM 1.50 per share and that the annual dividend growth rate is 8% p.a., what is the expected share price of Cilly Bhd?