Intro Bob's is a retail chain of hardware stores. The firm has 21,000 shares of stock outstanding that are currently valued at $63 a share. Firm's Beta is 1.2. The risk- free rate is 1% and the market risk premium is 6.8%. Firm expects to pay an annual dividend of $3 in one year. Dividend is expected to grow indefinitely at 5% annually. The firm also has 500 coupon bonds outstanding that have a face value of $1,000, a market price of $1,168, mature in 6 years and have a YTM of 5.65%. The tax rate is 35%. Part 1 "Attempt 2/3 for 6.7 pts. Assuming CAPM computes the right stock return, then is firm's share priced correctly at $63 now? What is the correct stock price? (hint: plug the correct stock return computed by CAPM into DDM to find the correct price) 1+ decimals Previous answers: 84.27 Submit