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PS #2 Type B: Marble Studios has been growing at a rate of 10% per year, and you expect this growth rate in earnings and
PS #2 Type B: Marble Studios has been growing at a rate of 10% per year, and you expect this growth rate in earnings and dividends to continue for another 5 years. The last dividend paid was $1, and if the steady (i.e., constant) growth rate after 5 years is 4%, what should the stock price be today? Assume that the stock has a beta of 2.0, Treasury bills yield 3%, and the market risk premium is 4%.
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