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A share of stock with a beta of 0.67 currently sells for $42. Investors expect the stock to pay a year-end dividend of $3. The
A share of stock with a beta of 0.67 currently sells for $42. Investors expect the stock to pay a year-end dividend of $3. The T-bill rate is 4%, and the market risk premium is 7%. If the stock is perceived to be fairly priced today, what must be investors expectation of the price of the stock at the end of the year?
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