Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 27, 2024

A share of stock sells for $50 today. The beta of the stock is 1.4, and the expected return on the market is 10 percent.

A share of stock sells for $50 today. The beta of the stock is 1.4, and the expected return on the market is 10 percent. The stock is expected to pay a dividend of $1 in one year. If the risk-free rate is 4.5 percent, what will the share price be in one year?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access to Expert-Tailored Solutions

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

Step: 2

Step: 3

Ace Your Homework with AI

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

Get Started

Students also viewed these Finance questions

Question

Consider a renewal process having the gamma (n, ) interarrival distribution, and let Y (t) denote the time from t until the next renewal. Use the theory of semi-Markov processes to show that?

Answered: 1 week ago

Question

★★★★★

An auto dealership is advertising that a new car with a sticker price of $35,208 is on sale for $25,995 if payment is made in full, or it can be financed at 0 percent interest for 72 months with a...

Answered: 1 week ago

Question

★★★★★

Q02 (35 points) Assuming the ocean's level is currently rising at about 1.5 millimeters per year, write a pro- gram that displays a table showing the number of millimeters that the ocean will have...

Answered: 1 week ago

Question

★★★★★

A company had beginning inventory of 11 units at a cost of $23 each on March 1. On march 2, it purchased 5 units at $28 each. On march 8 it sold 25 units for $71 each. Using the FIFO perpetual...

Answered: 1 week ago

Question

★★★★★

When sequential long-term financing is involved, the choice of debt or equity influences the future financial A timing B flexibility C stability D liquidity of the firm.

Answered: 1 week ago

Question

★★★★★

C owns all of the stock of Z Corporation, which is worth $1 million. Z wants to acquire land worth $75,000 from D. C proposes to transfer $1.00 of cash to Z at the same time D transfers the land to...

Answered: 1 week ago

Question

★★★★★

Overview You are an accountant for the Crestview Financial Services firm. You have been examining financial statements for a client called LMS Manufacturing Corporation. You recently discovered key...

Answered: 1 week ago

Question

★★★★★

Figuring out how to frame things comes from asking yourself the question, firm grasp of the obvious is something that great negotiators are able to do. O "What is really going on here?" O "Has your...

Answered: 1 week ago

Question

★★★★★

Which one of the following depends on the risk control function to provide a clear profile of the applicant's loss exposures and related hazards? Available answer options Select only one option A...

Answered: 1 week ago

Previous Question Next Question