Question
Suppose that the ABC company is expected to be worth $50 per share one year from today. The company pays annual perpetual dividend of $1
Suppose that the ABC company is expected to be worth $50 per share one year from today. The company pays annual perpetual dividend of $1 per share. How much are you willing to pay for one share today if the risk- free rate is 3%, the expected rate of return on the market is 15%, and the company's beta is 1.2?
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Survey Of Economics, Principles, Applications, And Tools
Authors: Arthur O'Sullivan, Steven M. Sheffrin, Stephen J. Perez
5th Edition
0132556073, 978-0132556071
