Question
Stock B is a non-dividend paying stock with spot price $123. The beta of the stock is 1.5, the risk free rate is 3% and
Stock B is a non-dividend paying stock with spot price $123. The beta of
the stock is 1.5, the risk free rate is 3% and the expected market return is 9%.
What is the 1 year forward price of stock B?
Answer: 126.69
When I calculate 123 * e(0.12) it gives me 138.68 and not 126.69, could you explain?
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Health Care Finance Basic Tools For Nonfinancial Managers
Authors: Judith J. Baker, R.W. Baker, Neil R. Dworkin
5th Edition
1284118215, 978-1284118216
