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Integrated Potato Chips paid a S1 per share dividend yesterday. You expect the dividend to grow steadily at a rate of4% per year. What is the expected dividend in each of the next 3 years? (3 points) stock sell now? (3 points) now? (4 points) b If the discount rate for the stock is 12%, at which price will the e Whats the expected stock price 3 years (the 4h year) from s. You are considering acquiring a firm that you believe can generate expected cash flows of S10,000 a year forever. However, you recognize that those cash flows are uncertain. aSuppose you believe that the beta of the firm is 0.4. How much is the firm worth if the risk-free rate is 4% and the expected rate of return on the market portfolio is 11%? (5 points) b By how much will you overvalue the firm if its beta is actually 0.6? (5 points) 第5页共7页
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