Implications of the measurement of the stock

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In your new role as lead analyst in emerging stocks it is your responsibility to provide financial advice to the trading desk at your company. One of your staff believes that they have found a good stock for purchasing. The following characteristics on the stock and the overall market are provided by your staff for your information:

1. Recently paid a dividend of 45 cents per share

2. Growth in dividends of 8% per annum

3. Beta of 1.7

4. Market return of 9% per annum

5.Risk free rate of 2%

6.Current market price of the share of $3.10.

Could you Use information 1 to 6 to Provide a recommendation of a buy or a sell for the share and an indication of the possible limitations with the valuation of the share. And Identify and discuss the implications of the measurement of the stock and market characteristics on the share price.

Reference no: EM132050625

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