Assume that all investors hold the stocks forever and the beta value of Stock Y is half of that of Stock X. For Stock X, the expected current price is $1.06 and investors are expected to receive a dividend of $0.1 per year forever. For Stock Y, investors are expected to receive a dividend of $0.2 with a growth rate of 0.7% per year. The market risk premium is 6%. In the past five years, the average return rate of the stock market is 7% per year.

What is the expected current price of Stock Y? Provide the assumption(s) of your calculation.

Answer for the expected current price of Stock Y (two decimal places): ___________

Calculation steps:

Assumptions: