Question
You are assigned to estimate the share price of GNK Industries. The company's beta is 0.9, and the next dividend is expected to be $0.75
You are assigned to estimate the share price of GNK Industries. The company's beta is 0.9, and the next dividend is expected to be $0.75 per share. The dividends are paid annually and are not expected to change. If the 10-year government bond yield is 1.5% and the market risk premium is 6.5%, what is GNK's fair share price?
Select one:
a. $8.44
b. $12.50
c. $10.20
d. $9.71
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Financial Institutions Management A Risk Management Approach
Authors: Anthony Saunders, Marcia Cornett, Otgo Erhemjamts
10th Edition
1260013820, 978-1260013825
