Question
Part A. The MLS Tech has just paid a dividend of $2.0, and that dividend is expected to grow at a constant rate of 4.0%
Part A.
The MLS Tech has just paid a dividend of $2.0, and that dividend is expected to grow at a constant rate of 4.0% per year in the future. The company's beta is 1.2, the market risk premium is 5.0%, and the risk-free rate is 3.0%. What is the company's current stock price?
Part B.
A stock currently sells for $35.55 per share. The stock's dividend is projected to increase at a constant rate of 5.0% per year. The required rate of return on the stock rs is 9.50%. What is the expected price 3 years from today?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Corporate Finance A Focused Approach
Authors: Michael C. Ehrhardt, Eugene F. Brigham
4th Edition
1439078084, 978-1439078082
