Question
XYZ's current dividend per share is $1.07. You expect dividends to grow at 5% per year into perpetuity. XYZ's beta is 0.85. The current risk
XYZ's current dividend per share is $1.07. You expect dividends to grow at 5% per year into perpetuity. XYZ's beta is 0.85. The current risk free rate is 2.9%, and the expected return on the market portfolio is 7.4%. Use the CAPM to estimate XYZ's required return on equity. What is the underlying value of the XYZ stock per share?
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Basic Finance An Introduction To Financial Institutions, Investments, And Management
Authors: Herbert B. Mayo
12th Edition
1337691011, 978-1337691017
