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Can Someone please explain to me how to get the answers listed at the bottom for these parts of #10? Example #10 Yost Rocks, Inc.
Can Someone please explain to me how to get the answers listed at the bottom for these parts of #10? Example #10 Yost Rocks, Inc. just paid a $2 dividend, which it expects to maintain for the foreseeable future. The firm has a beta of 1.2 and U.S. Treasury bills yield 3%. If the market risk premium is 9.6%, what is the current price of the stock? #10 If the firm expects to maintain a constant 3% growth rate in dividends, what would the price be today? #10 If the firm was unable to pay a dividend for the next 4 years, but then paid a $2 dividend which grew at a constant 3%, what would the price be today? 10. $13.77; $17.88; $10.09
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