Question
The market price of a stock paying a constant perpetual dividend is $46.22. Its expected rate of return is 14.8%. The risk-free rate is 5.28%
The market price of a stock paying a constant perpetual dividend is $46.22. Its expected rate of return is 14.8%. The risk-free rate is 5.28% and the market risk premium is 6.72%. What will be the market price of the stock if its correlation coefficient with the market portfolio doubles (and all other variables remain unchanged)?
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Cases In Healthcare Finance
Authors: George H. Pink, Paula H. Song
7th Edition
1640553177, 978-1640553170
