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A company has a beta of 1.9. The risk-free borrowing and lending rate is 5% and the market risk premium is 9%. It is not
A company has a beta of 1.9. The risk-free borrowing and lending rate is 5% and the market risk premium is 9%. It is not expected to pay a dividend for several years, yet it is currently priced at $20 per share. What price do investors expect to see one year from now if market rates are stable and there is no change in expectations about the companys earnings?
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