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A share of stock sells for $49 today. The beta of the stock is 1.4 and the expected return on the market is 17 percent. The s

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Answer #1

Cost of equity = 21.88% 0.048+(1.4*(0.17-0.048)) Price = 01/(ke-g) D1 = Ke = ke-g= growth rate = = $49.00 $0.80 21.88% 1.63%

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