Question
Assuming a constant growth rate model and using the 3-year dividend growth rate (provided by Reuters - Keymetrics - Growth) please compute the expected stock
Assuming a constant growth rate model and using the 3-year dividend growth rate (provided by Reuters - Keymetrics - Growth) please compute the expected stock price for Emerson. Write down the formula you are using and explain your answer briefly. In the light of what you found, can we say that Emersons stock price is fair? Assume that the unanticipated inflation caused the security-market line to shift upwards 1 percentage point. Will you modify your answer in above? Explain. If market risk premium increases 1 percent, will you modify your answer in above? Share Price: 47.37
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