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A stock has a current price of $24. Investors require a 10% return on this constant dividend stock. The risk free rate is 2% and
A stock has a current price of $24. Investors require a 10% return on this constant dividend stock. The risk free rate is 2% and the expected return on the market is 12%. If the beta on this stock increases by 40%, what is the new price of this stock?
The answer is $18.18. I need to understand the math though. No Excel formulas please.
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