Question
Q2. Assume the risk-free rate is 6% and the market risk premium is 6%. The stock of physicians care network (PCN) has a beta of
Q2. Assume the risk-free rate is 6% and the market risk premium is 6%. The stock of physicians care network (PCN) has a beta of 1.5. The last dividend paid by PCN (D0) was $2 per share.
WhatwouldPCNstockvaluebeifthedividendwereexpectedtogrowataconstant(3points)-5%?0%?5%?10%?What would be the stock value if the growth rate were 10% but PCN beta fell to (3 points)1.0?
0.5?
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Focus On Personal Finance
Authors: Jack R. Kapoor, Les R. Dlabay Professor, Robert J. Hughes, Melissa Hart
5th Edition
0077861744, 978-0077861742
