You are considering an investment in Just us Corporations stock, which is expected to pay a dividend

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You are considering an investment in Just us Corporation’s stock, which is expected to pay a dividend of $2.25 a share at the end of the year D= $2 25 and has a beta of 0.9. The risk-free rate is 4.9%, and the market risk premium is 5%. Just us currently sells for $46.00 a share, and its dividend is expected to grow at some constant rate, g. Assuming the market is in equilibrium, what does the market believe will be the stock price at the end of 3 years? (That is, what is P̂3?)

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...
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