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The risk-free rate is 1.76% and the market risk premium is 5.07%. A stock with a...

The risk-free rate is 1.76% and the market risk premium is 5.07%. A stock with a β of 0.81 just paid a dividend of $2.88. The dividend is expected to grow at 23.26% for three years and then grow at 4.92% forever. What is the value of the stock?

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Answer #1

Year Cash flows $3.55 $4.38 $5.39 $597.73 pv @ 5.87% 0.94458 0.89224 0.84279 (5.39*1.0492)/(0.0587-0.0492) 0.84279 Current sh

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