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The Francis Company is expected to pay a dividend of D1 = $1.25 per share at...

The Francis Company is expected to pay a dividend of D1 = $1.25 per share at the end of the year, and that dividend is expected to grow at a constant rate of 6.00% per year in the future. The company's beta is 0.85, the market risk premium is 5.50%, and the risk-free rate is 4.00%. What is the company's current stock price?

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Answer #1

Companys current Stock price can be Calculated using dividend growth model from the given information in question. DividendExpected return (Y) = Rft B (Rm-Rt) - 40 +0.85(5-50%) 8675 % constant growth rate - 6°/ companys current stock price (P) = 7

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