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Calculate the beta coefficient for Nova Orbit Ltd. using the provided financial data and CAPM.
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3 stepsCalculate the expected dividend for the next period ().
The current dividend () is
\7.40g$) is 5.2%.Calculate the required rate of return () using the Gordon Growth Model.
The current share price () is
\62$.Calculate the beta coefficient () using the Capital Asset Pricing Model (CAPM).
The risk-free rate () is 10.25% (0.1025).
The average market return () is 16.90% (0.1690).Rounding to two decimal places:
The beta coefficient of Nova Orbit Ltd. is .
1.2
Since the calculated beta coefficient is approximately 1.13, which is greater than 1, Nova Orbit Ltd's ordinary shares are considered more volatile than the overall market. This indicates that the shares carry a higher systematic risk compared to the market.
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