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1. Suppose you are looking at Pear Inc. stock. You expect the next year dividend payment will be $3.50 per share and the stock price
1. Suppose you are looking at Pear Inc. stock. You expect the next year dividend payment will be $3.50 per share and the stock price after the dividend payment will be $140. If Pear stock has a Beta of 2, risk free rate is 5%, and expected return of the stock market is 10%, what is the expected return for the stock? How much are you willing to pay for a share of Pear stock today?
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