Question
Cartwright Brothers stock is currently selling for $40 a share. The stock is expected to pay a $4 dividend at the end of the year.
Cartwright Brothers stock is currently selling for $40 a share. The stock is expected to pay a $4 dividend at the end of the year. The stocks dividend is expected to grow at a constant rate of 17 percent a year forever. The risk-free rate (kRF) is 7 percent and the market risk premium (kM kRF) is 5 percent. What is the stocks beta?
| a. | 5.00 | |
| b. | 1.00 | |
| c. | 2.00 | |
| d. | 3.00 | |
| e. | 4.00 |
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Spellbound By Financial Reality
Authors: John A. House ChFC CEPA
1st Edition
1982278854,1982278862
