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Low Cost Airline is expected to pay a dividend of $2 in the upcoming year. The risk-free rate of return is 4% and the expected
Low Cost Airline is expected to pay a dividend of $2 in the upcoming year. The risk-free rate of return is 4% and the expected return on the market portfolio is 14%. Analysts expect the price of Low Cost Airline shares to be $22 a year from now. The beta of the company's stock is 1.25. Based on the above information answer questions
The market's required rate of return on Low Costs stock?
What is the intrinsic value of Low Costs stock today?
If Low Costs intrinsic value is 21.00 today, what must be its growth rate?
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