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Assume that the risk-free rate of interest is 4% and the expected rate of return on the market is 16%. A share of stock sells
Assume that the risk-free rate of interest is 4% and the expected rate of return on the market is 16%. A share of stock sells for $63 today. It will pay a dividend of $3 per share at the end of the year. Its beta is 1.1. What do investors expect the stock to sell for at the end of the year?
Expected Stock Price:
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