Question
The stock of Tartan Corporation paid a dividend of $2.00 this year. Dividends are expected to grow at the constant rate of 8% indefinitely. The
The stock of Tartan Corporation paid a dividend of $2.00 this year. Dividends are expected to grow at the constant rate of 8% indefinitely. The expected return on the market is 11%, and the risk-free rate is 4%. The equity premium is expected to remain constant for the foreseeable future. If the beta of the stock is 0.8, what is the maximum price you should pay for a share of Tartan Corporation?
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
13th edition
1439078106, 111197375X, 9781439078105, 9781111973759, 978-1439078099
