Question
A companys stock has the following attributes: Current Market price of $25.00 Current annual dividend of $1.50 Constant dividend growth rate of 4% A beta
A companys stock has the following attributes:
- Current Market price of $25.00
- Current annual dividend of $1.50
- Constant dividend growth rate of 4%
- A beta of 1.14
The risk-free rate is currently 3.4% and the market risk premium is 6.0%. If the risk-free rate suddenly jumps to 4.25% what happens to this companys stock price (Give the price to 2 decimal places)?
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Fixed Income Securities Tools For Todays Markets
Authors: Bruce Tuckman, Angel Serrat
3rd Edition
0470891696, 978-0470891698
