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Assume that a company is expected to pay a dividend of $2.00 next year and the dividend will not grow. The risk-free rate is 7.5%,
Assume that a company is expected to pay a dividend of $2.00 next year and the dividend will not grow. The risk-free rate is 7.5%, beta is 1.25 and the market-risk premium is 6%. What is the intrinsic value of a share of the company? The current market value of the share is $12. Is the stock fairly valued?
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Accounting An Introduction
Authors: Eddie McLaney, Peter Atrill
3rd Edition
0273688227, 978-0273688228
