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You are considering an investment in Justus Corporation's stock, which is expected to pay a dividend of $1.75 a share at the end of the
You are considering an investment in Justus Corporation's stock, which is expected to pay a dividend of $1.75 a share at the end of the year (D1=$1.75) and has a beta of 0.9 . The risk-free rate is 5.3%, and the market risk premium is 4.5%. Justus currently sells for $35.00 a share, and its dividend is expected to grow at some constant rate, 9 . Assuming the market is in equilibrium, what dons the market believe will be the stock price at the end of 3 years? (That is, what is P^3 ?) Do not round intermediate calculations. Found your: answer to the nearest cent. \$
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