(1) Calculate the required return to KCC’s stock given that the risk-free rate
is at 5%, the market risk premium is at 3% (or the expected market return at 8%),
and the beta of KCC. is at 1.2.
(2) KCC, Inc., paid a $10/share dividend in the last fiscal period and its net profits
are expected to grow at 5%. How much should KCC, Inc.’s stock trade per share?