Excel Online Structured Activity: Constant growthYou are considering an investment in Justus Corporation's stock, which is expected to pay a dividend of $2.25 a share at the end of the year (D1 = $2.25) and has a beta of 0.9. The risk-free rate is 5.0%, and the market risk premium is 4.5%. Justus currently sells for $35.00 a share, and its dividend is expected to grow at some constant rate, g. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below Assuming the market is in equilibrium, what does the market believe will be the stock price at the end of 3 years? (That is, what is ?) Round your answer to two decimal places. Do not round your intermediate calculations.$ ___________. Excel template Saved vSeareFileHomeInsertDrawPage LayoutFormulasDataReview10 vB 田< 鱼、A、Arial...、口へGC.D.Constant growthExpected year -end dividend (D)Beta coefficient$2.2506 0Risk-free rate (Tar)Market risk premium (RPM)7 Current stock price (Po)Market in equilibrium4.50%YesFormulas10 Calculate required return:11 Required retum on common stock13 Calculate constant growth rate, g:14 Total return on common stockVIN#15 Expected dividend yield16 Expected capital gains yield1718 Calculate stock price in 3 years, P3:19 Number of years from today20 Calculate P3 using Po3#N/A27.22 Alternative calculation:23 Calculate P, using dividends#N/A242527.E Sheet1Calculation Mode AutomaticWorkbook Statistics

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Description: Excel Online Structured Activity: Constant growthYou are considering an investment in Justus Corporation's stock, which is expected to pay a dividend of $2.25 a share at the end of the year (D1 = $2.25) and has a beta of 0.9. The risk-free rate is 5.

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ou are considering an investment in Justus Corporation's stock, which is expected to pay a dividend of $2.25 a share at the end of the year (D1 = $2.25) and has a beta of 0.9. The risk-free rate is 5.0%, 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, g. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below Assuming the market is in equilibrium, what does the market believe will be the stock price at the end of 3 years? (That is, what is ?) Round your answer to two decimal places. Do not round your intermediate calculations.

ou are considering an investment in Justus Corporation's stock, which is expected to pay a dividend of $2.25 a share at the end of the year (D1 = $2.25) and has a beta of 0.9. The risk-free rate is 5.0%, 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, g. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below Assuming the market is in equilibrium, what does the market believe will be the stock price at the end of 3 years? (That is, what is ?) Round your answer to two decimal places. Do not round your intermediate calculations.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter15: Capital Investment Analysis

Section: Chapter Questions

Problem 15.2.3MBA

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Excel Online Structured Activity: Constant growth

You are considering an investment in Justus Corporation's stock, which is expected to pay a dividend of $2.25 a share at the end of the year (D₁ = $2.25) and has a beta of 0.9. The risk-free rate is 5.0%, 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, g. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below

Assuming the market is in equilibrium, what does the market believe will be the stock price at the end of 3 years? (That is, what is ?) Round your answer to two decimal places. Do not round your intermediate calculations.

$ ___________.

Excel template Saved v
Seare
File
Home
Insert
Draw
Page Layout
Formulas
Data
Review
10 v
B 田< 鱼、A、
Arial
...
、口へG
C.
D.
Constant growth
Expected year -end dividend (D)
Beta coefficient
$2.25
06 0
Risk-free rate (Tar)
Market risk premium (RPM)
7 Current stock price (Po)
Market in equilibrium
4.50%
Yes
Formulas
10 Calculate required return:
11 Required retum on common stock
13 Calculate constant growth rate, g:
14 Total return on common stock
VIN#
15 Expected dividend yield
16 Expected capital gains yield
17
18 Calculate stock price in 3 years, P3:
19 Number of years from today
20 Calculate P3 using Po
3
#N/A
27.
22 Alternative calculation:
23 Calculate P, using dividends
#N/A
24
25
27.
E Sheet1
Calculation Mode Automatic
Workbook Statistics

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