Question
A share of stock with a beta of .65 now sells for $46. Investors expect the stock to pay a year-end dividend of $2. The
A share of stock with a beta of .65 now sells for $46. Investors expect the stock to pay a year-end dividend of $2. The T-bill rate is 6%, and the market risk premium is 9%. At what price will the stock reach an "equilibrium" at which it is perceived as fairly priced today?
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Financial and Management Accounting
Authors: Pauline Weetman
7th edition
1292086599, 978-1292086590
