QUESTION 18

Elegante Homes stock just paid an annual dividend of $3.20 a share and is expected to increase that amount by 5 percent per year. If you are planning to buy 1,000 shares of this stock now, how much should you expect to pay per share if the beta of the stock is 0.85, the market risk premium is 7%, and the risk-free rate is 3.05% at the time of your purchase? (round answer to 2 decimal places) a. $29.10 b. $30.54 c. $63.83 d. $76.19 e. $84.00