Clients Investments: 1. Tudor Ltd., is a publicly listed Australian company that your client is...
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Clients Investments: 1. Tudor Ltd., is a publicly listed Australian company that your client is following closely, however your client does not have the requisite skills to evaluate the company and, as such has provided you with sufficient information. The historical price of Tudor Ltd. is given below. Tudor Ltd. is closely integrated with the Australian economy and so the rates of return for the Australian economy as a whole can be used in the evaluation process. You know that Australian Treasury bills currently pay a return of 4% p.a., the stock market return over the same period averaged 10% p.a., and have calculated the standard deviation of the market returns to be 12% p.a. Tudor Ltd. beta is estimated at 1.40. Lastly, you have identified the historical returns and dividends (below). Using the above information, identify whether it is a good idea, for your client, to invest in Tudor. Explain your reasoning for your decision
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