Question
You have been provided with the following information regarding a common share. Risk-free rate 2.0%; Market portfolio rate of return 6.50%; Beta for the firm
You have been provided with the following information regarding a common share.
Risk-free rate 2.0%; Market portfolio rate of return 6.50%; Beta for the firm 1.50; Dividend expected next year $2.50; Dividend growth rate (expected to remain constant) 2.0%
Given this information, what price are you willing to pay for a share?
- A.$37.78
- B.$37.04
- C.$25.64
- D.$26.15
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Entrepreneurial Finance
Authors: J. Chris Leach, Ronald W. Melicher
2nd Edition
0324289235, 9780324289237
