Share with expected dividends

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Reference no: EM131909811

You expect the Gap to hit $58 per share with expected dividends of $0.75 in one year. Its current price is $46 and your research estimates the beta at 1.15. Market risk premium is .07 and the U.S. T-bill is expected to yield .05. Is the Gap a good investment? Conduct security analysis using the CAPM. Explain your answer.

Reference no: EM131909811

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