Evaluate the expected style characteristics of namib limited

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Reference no: EM132944623

Namib Limited has a ROE and equity risk premium of 36% and 6.10% respectively. Its shares are currently selling for R59.36 and it has a trailing 12-month earnings and dividends per share of R3.84 and R1.42 respectively. The profit margin on sales is 24.10%.

The estimated Fama-French factor sensitivity of Namib and the risk premiums associated with these factors are given in the table below:

                            Factor sensitivity             Risk premium (%)
Market factor             1.03                             4.6
Size factor                -0.25                             2.1
Value factor                 0.50                               0.9

Problem 1: Evaluate the expected style characteristics of Namib Limited, based on the factor sensitivities given.

Problem 2: What is the style characteristics of Namib Limited, given its value factor?

A. value-oriented.
B. growth-oriented.
C. None of the above.

Reference no: EM132944623

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