Marcus Isherwood's firm requires all its analysts to use a dividend discount model (DDM) and the capital asset pricing m

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answerhappygod
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Marcus Isherwood's firm requires all its analysts to use a dividend discount model (DDM) and the capital asset pricing m

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Marcus Isherwood's firm requires all its analysts to use a
dividend discount model (DDM) and the capital asset pricing model
(CAPM) to value dividend-paying stocks. Using DDM and CAPM,
Isherwood must now value Blood Pressure Ltd.
Blood Pressure Ltd. characteristics
Beta

1.50
This year’s dividend
$ 0.45
risk-free
rate
2.00%
Expected market return
9.50%
Calculate the required rate of return for Blood
Pressure.
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