Question
Assume that CAPM is valid. A share of stock is now selling for $110. It will pay a dividend of $8 per share at the
Assume that CAPM is valid. A share of stock is now selling for $110. It will pay a dividend of $8 per share at the end of the year. Its beta is 1. What do investors expect the stock to sell for at the end of the year? Assume the risk-free rate is 4% and the expected rate of return on the market portfolio is 15%
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Financial Management Theory and Practice
Authors: Eugene F. Brigham, Michael C. Ehrhardt
16th edition
1337902608, 978-1337902601
