A share of stock with a beta of 1.2 now sells for $100. Investors expect the stock to pay a year-end dividend of $1.50. The treasury bill rate is 5 percent and the expected rate of return on the market portfolio is 12 percent. If the stock is perceived to be fairly priced today, what must be investors’ expectation for the price of the stock at the end of the year? $109.50 $111.90 $116.50 $117.90 $106.90
A share of stock with a beta of 0.77 now sells for $50. Investors expect the stock to pay a year-end dividend of $3. The T-bill rate is 4%, and the market risk premium is 8%. a. Suppose investors believe the stock will sell for $52 at year-end. Calculate the opportunity cost of capital. Is the stock a good or bad buy? What will investors do? b. At what price will the stock reach an “equilibrium” at which it is...
A share of stock with a beta of 0.76 now sells for $51. Investors expect the stock to pay a year-end dividend of $2. The T-bill rate is 3%, and the market risk premium is 7%. a. Suppose investors believe the stock will sell for $53 at year-end. Calculate the opportunity cost of capital. Is the stock a good or bad buy? What will investors do? (Do not round intermediate calculations. Round your opportunity cost of capital calculation as a...
A share of stock sells for $31 today. The beta of the stock is 1 and the expected return on the market is 10 percent. The stock is expected to pay a dividend of $0.6 in one year. If the risk-free rate is 5.3 percent, what should the share price be in one year?
Problem 5: A share of stock sells for $100 today. It will pay a dividend of $6 per share at the end of the year. Its beta is 0.8. What do investors expect the stock to sell for at the end of the year? The risk-free rate of interest is 4% and the expected rate of return on the market is 12%
A share of stock is now selling for $100. It will pay a dividend of $6 per share at the end of the year. Its beta is 1. What must investors expect the stock to sell for at the end of the year? Assume the risk-free rate is 6% and the expected rate of return on the market is 20%. (Round your answer to 2 decimal places.) Expected selling price
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A share of stock sells for $54 today. The beta of the stock is 0.8 and the expected return on the market is 17 percent. The stock is expected to pay a dividend of $1.10 in one year. If the risk-free rate is 5.3 percent, what should the share price be in one year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Share price
Assume that the risk-free rate of interest is 5% and the expected rate of return on the market is 17%. A share of stock sells for $51 today. It will pay a dividend of $5 per share at the end of the year. Its beta is 1.1. What do investors expect the stock to sell for at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Expected stock price
A share of stock is now selling for $105. It will pay a dividend of $7 per share at the end of the year. Its beta is 1. What must investors expect the stock to sell for at the end of the year? Assume the risk-free rate is 7% and the expected rate of return on the market is 16%.
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 stock is expected to pay a dividend of $0.80 in one year. If the risk-free rate is 4.8 percent, what should the share price be in one year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) & Answer is complete but not entirely correct. Share price $ 21.88