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please solve 1 a and b, thanks! Question 1. A company with a stock price Pold=$32 had a constant dividend growth rate last estimated to
please solve 1 a and b, thanks!
Question 1. A company with a stock price Pold=$32 had a constant dividend growth rate last estimated to be gold=12%. Suppose now that the market updated its beliefs on the constant dividend growth rate and it is now estimated to be gnew=15% After this new estimate the stock price went up to Pnew=$40. The required rate of return on the market is rM=16%, the risk-free rate is rRF=6%. These market fundamentals and the company's beta all remained the same. a) (15 points) What was the last dividend of the company? b) (15 points) What is the beta of the company Step by Step Solution
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