Question
1. A stock has just paid a $3.00 dividend from earnings per share of $5.50. The risk-free rate is 2.75% and the risk premium is
1. A stock has just paid a $3.00 dividend from earnings per share of $5.50. The risk-free rate is 2.75% and the risk premium is 7%. The firms beta is 1.7. If the dividend is expected to grow at a constant rate, what is the price of the stock today?
2. Given the information in question 1 what do you expect the price to be in 1 year?
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Lessons In Corporate Finance
Authors: Paul Asquith, Lawrence A. Weiss
2nd Edition
1119537835, 978-1119537830
