Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A stock has just paid a $0.50 dividend from earnings per share of $1.50. The stocks beta is 0.8, the risk-free rate is 1.25% and

  1. A stock has just paid a $0.50 dividend from earnings per share of $1.50. The stocks beta is 0.8, the risk-free rate is 1.25% and the expected return on the market is 8%. If the dividend is expected to grow at a constant rate, what is the price of the stock today? What do you expect the price to be in 1 year?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

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

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

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

Get Started

Recommended Textbook for

International Finance Transactions Policy And Regulation

Authors: Hal Scott, Anna Gelpern

23rd Edition

1647084105, 978-1647084103

More Books

Students also viewed these Finance questions