Question
Magnolia Company's most recent dividend paid was $0.50, the expected growth rate for future dividends is 2%. The firms stock currently has a beta of
Magnolia Company's most recent dividend paid was $0.50, the expected growth rate for future dividends is 2%. The firms stock currently has a beta of 1.50 If the expected return is 8% for the market and 3% for a 3-month T-bill, what is the price of Magnolias common stock, assuming the growth rate will continue forever?
| a. | $6.00 |
| b. | $3.92 |
| c. | $6.67 |
| d. | $3.85 |
| e. | $5.10 |
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Personal Finance
Authors: Jack R Kapoor, Glencoe McGraw Hill, Les R Dlabay, Robert J Hughes
1st Edition
0078698006, 9780078698002
