CAPM = Rf + Beta ( Rm - Rf )
CAPM = 12% + 1.5 ( 18 - 12 )
CAPM = 21%
According to Gordon's Model
Po = D1 / (Ke - g)
Po = 2.45$/ ( 0.21 - 0.0305)
Po = 13.65 $
where g = Growth , Ke = CAPM , D1 = Expected Dividend
). A company has a beta of 1.50, the risk-free rate of STOCK VALUATION. 20 Exercise...
Glass Art Manufacturing Berhad has a beta of 1.50, the risk-free rate of interest is currently 12 percent, and the required return on the market portfolio is 18.00 percent. The company plans to pay a dividend of RM1.96 per share in the coming year and anticipates that its future dividends will increase at an annual rate consistent with that experienced over the 2016-2018 period. Year Dividend (RM) 2016 1.68 2017 1.77 2018 1.86 Estimate the value of Glass Art Manufacturing's...
5) A company has systematic risk (or beta factor) 1.25, the risk-free rate of interest is currently 5.45%, and the required return on the market portfolio is 12%. The company plans to pay a dividend of AED 3.05 per share in the coming year (2020) and anticipates that its future dividends will increase at an annual rate consistent with that experienced over the 2001-2003 period: End of Year Dividend 2017 2.00 2018 3.00 2019 2.10 Estimate the stock price value...
Integrative Risk and valuation Giant Enterprises' stock has a required return of 16.7 %. The company, which plans to pay a dividend of $1.69 per share in the coming year, anticipates that its future dividends will increase at an annual rate consistent with that experienced over 2013 -2019 period, when the following dividends were paid 2019 $1.61 2018 $1.53 2017 $1.46 2016 $1.39 2015 $1.32 2014 $1.26 2013 $1.20 a. If therisk-freerate is 6%,what is the risk premium onGiant'sstock? b. ...
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Integrative-Risk and valuation Giant Enterprises' stock has a required return of 14.8%. The company, which plans to pay a dividend of $2.60 per share in the coming year, anticipates that its future dividends will increase at an annual rate consistent with that experienced over 2013-2019 period, when the following dividends were paid: E. a. If the risk-free rate is 4%, what is the risk premium on Giant's stock? b. Using the constant-growth model, estimate the...
P7-23 (similar to) Question Help Integrative-Risk and valuation Giant Enterprises' stock has a required return of 14.4%. The company, which plans to pay a dividend of $2.57 per share in the coming year, anticipates that its future dividends will increase at an annual rate consistent with that experienced over 2013-2019 period, when the following dividends were paid: B a. If the risk-free rate is 4%, what is the risk premium on Giant's stock? b. Using the constant-growth model, estimate the...
Integrative—Risk and valuation Giant Enterprises' stock has a required return of 11.6%. The company, which plans to pay a dividend of $1.63 per share in the coming year, anticipates that its future dividends will increase at an annual rate consistent with that experienced over 2009-2015 period, when the following dividends were paid: :: a. If the risk-free rate is 8%, what is the risk premium on Giant's stock? b. Using the constant-growth model, estimate the value of Giant's stock. (Hint:...
76) Tangshan Antiques has a beta of 1.40, the annual risk-free rate of interest is currently 10 percent, and the required return on the market portfolio is 16 percent. The firm estimates that its future dividends will continue to increase at an annual compound rate consistent with that experienced over the 2000-2003 period. Year 2000 2001 2002 2003 Dividend $2.70 2.95 3.25 3.40 (a) Estimate the value of Tangshan Antiques stock (b) A lawsuit has been filed against the company...
Giant Enterprises' stock has a required return of 15.1%.
The company, which plans to pay a dividend of $1.52 per share in
the coming year, anticipates that its future dividends will
increase at an annual rate consistent with that experienced over
2013-2019 period, when the following dividends were paid:
a.If the risk-free rate is 7%,what is the risk premium on
Giant's stock? round to one decimal place
b.Using the constant-growth model, estimate the value of
Giant's stock.
(Hint:
Round the...
Tangshan Antiques has a beta of 1.40, the annual risk-free rate of interest is currently 10 percent, and the required return on the market portfolio is 16 percent. The firm estimates that its future dividends will continue to increase at an annual compound rate consistent with that experienced over the 2016-2019 period. Estimate the value of Tangshan Antiques stock at the end of 2019. After the 2019 dividend has been paid. Round your final answer to two decimal places. Year...
AA Corporation’s stock has a beta of 8. The risk-free rate is 4.5% and the expected return on the market is 13.6%. What is the required rate of return on AA’s stock? The market and Stock J have the following probability distributions: Probability rM rJ 0.2 12% 16% 0.3 8 7 0.5 20 13 Calculate the expected rates of return for the market and Stock J. Suppose you manage a $6 million fund that consists of four stocks with...