A share of stock sells for $50 today. It will pay a dividend of $6 per share

Question:

A share of stock sells for $50 today. It will pay a dividend of $6 per share at the end of the year. Its beta is 1.2. What do investors expect the stock to sell for at the end of the year?

Assume that the risk-free rate of interest is 6% and the expected rate of return on the market is 16%.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...