SML-CAPM Question: Antigone Inc.recently Paid Out a Dividend of $1.75, and Analysts

Essay

SML-CAPM Question:
Antigone Inc.recently paid out a dividend of $1.75, and analysts expect it to grow at 6% for the foreseeable future.The market rate of return is 17%, the T-Bill rate is quoted at 4%, and Antigone stock is selling at $15.50 (beta 1.2).Based on this information, answer the following questions:
a)What is the expected return on Antigone stock?
b)Are Antigone shares overpriced, underpriced, or correctly priced?
c)Is Antigone stock above, below, or on the SML?
d)What is the equilibrium price of Antigone stock?