Question
A companys next dividend payment is 30 cents. The dividend growth rate will remain at 10% forever. The risk-free rate of interest is 3%, the
A companys next dividend payment is 30 cents. The dividend growth rate will remain at 10% forever. The risk-free rate of interest is 3%, the market risk premium is 4% and the company has a beta of 1.2. Calculate the stock price according to the Gordon growth model. If the market price of the share is $4.5, is the stock undervalued or overvalued?
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Essentials Of Health Care Finance
Authors: William O. Cleverley, James O. Cleverley, Paula H. Song
7th Edition
0763789291, 978-0763789299
