Question
Suppose that stock L sells for $75 today and is expected to pay a dividend of $1.00 at the end of one year. Firm L's
Suppose that stock L sells for $75 today and is expected to pay a dividend of $1.00 at the end of one year. Firm L's beta is 1.60, the market expected return is 10%, and the riskless return is 2%. Using the CAPM and an assumption about market equilibrium, forecast Firm L's price in one year.
Multiple Choice
- $75.74
- $93.61
- $85.10
- $97.01
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The Changing Geography Of Banking And Finance
Authors: Pietro Alessandrini ,Michele Fratianni ,Alberto Zazzaro
1st Edition
1441947205, 978-1441947208
