A very important data is not given--time period.

I assume we are at the beginning of the year.

1 required rate of return (applying CAPM)

r=0.75*8%+4%=10%

share price at the end of the year should be 50*1.1-3=52.

2 yes

3 55/1.04

Thanks for your reply:)

The time period is 1-year. Two time point: the beginning point of the year and the ending point of the year.

Generally I agree with you in the first two questions. Since YTM comprises capital gain rate and divident rate,2 yuan capital gain is requested for this security at the equilibrium point.

But the third question,I can't follow you very much.I think DDM Model should be applied there.Then the equilibrium price will be only 30 yuan.I am not certain weather that makes some sense,

Yes, you were right

For the third one, I assume that the ￥54 of share price at the end of the year is given as a known variable because this is the only way that the equilibrium price can be worked out.

The cost of equity capital is the required rate of return demanded by share holders which is worked out in question 1 as 10%.

Therefore, the equilibrium price should be 54/1.10 at time t0. (Both the year-end dividend and capital gain are already taken into the "54")