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Company ABC trades in the stock market. Its = 1. The market portfolio return is 12%. What is the expected return on companys stock? You
Company ABC trades in the stock market. Its = 1. The market portfolio return is 12%. What is the expected return on companys stock?
You are going to receive dividends from company ABC in years 1 and 2. After that, the company will disappear. The dividends will be $100 in every period. What is the price of the companys stock if you use the information from the previous question? Suppose now that the company will pay $100 in dividends but for 10 years. What is the new price? What is the price of the company if this pays $100 per period, forever?
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