Proctor and Gamble's current annual dividend (D 0 ) is $3 65 The dividend is expected to grow by 2 5 per year P G's beta is 0 38, the current risk free rate is 2 and the market risk premium is 8 What is the required return to the stock What is the intrinsic value (current price) of P G's stock If Proctor and Gamble is currently trading for 148 72 is the stock under or overvalued

Question: Proctor and Gamble's current annual dividend (D 0 ) is $3.65. The dividend is expected to grow by 2.5% per year. P&G's beta is 0.38,

Proctor and Gamble's current annual dividend (D₀) is $3.65. The dividend is expected to grow by 2.5% per year. P&G's beta is 0.38, the current risk-free rate is 2% and the market risk premium is 8%.

What is the required return to the stock?
What is the intrinsic value (current price) of P&G's stock?
If Proctor and Gamble is currently trading for 148.72 is the stock under- or overvalued?

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