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Chevrolet is expected to pay a dividend of $5 in the upcoming year. Dividends are expected to grow at the rate of 6% per year.
Chevrolet is expected to pay a dividend of $5 in the upcoming year. Dividends are expected to grow at the rate of 6% per year. The risk-free rate of return is 2.7%, and the expected return on the market portfolio is 9.6%. Investors use the CAPM to compute the market capitalization rate on the stock and use the constant-growth DDM to determine the intrinsic value of the stock. The beta of stock is estimated to be 1.4. Using the constant-growth DDM and the CAPM, the price of the stock is
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