A firm recently paid a dividend of $2.65 per share, but analysts expect the dividend to increase by 5% per year. The risk free rate is 2.5% and the market risk premium is 8%. If its beta is 1.65 and the market is in equilibrium what is the value of the stock?
A firm recently paid a dividend of $2.65 per share, but analysts expect the dividend to increase by 5% per year. The risk free rate is 2.5% and the market risk premium is 8%. If its beta is 1.65 and the market is in equilibrium what is the value of the stock?
Chapter8: Risk And Rates Of Return
Section: Chapter Questions
Problem 20PROB
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