Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1.) The risk-free rate is 3.59% and the market risk premium is 7.95%. A stock with a of 1.33 just paid a dividend of $1.99.

1.) The risk-free rate is 3.59% and the market risk premium is 7.95%. A stock with a of 1.33 just paid a dividend of $1.99. The dividend is expected to grow at 23.55% for three years and then grow at 3.61% forever. What is the value of the stock?

2.) A stock just paid a dividend of $2.82. The dividend is expected to grow at 26.89% for three years and then grow at 3.77% thereafter. The required return on the stock is 13.83%. What is the value of the stock?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions