Desco price in two different stock valuation methods

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Assume that DESCO has expected return for the market is 19 percent; standard deviation of market return is 23 percent; risk-free rate is 4.75 percent and correlation between DESCO stock and the market is 1.15. Calculate the beta and required return for DESCO stock. If DESCO pays 65% of earnings as dividend, currently per share earnings Tk. 1.56 and dividend growth rate is 8.6%, whereas earnings will grow at 11% and market price Tk. 34.80. Compare and contrast your findings of DESCO price in two different stock valuation methods.

Reference no: EM132538368

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