Expected return = risk free rate + beta * market risk premium
= 2 + 1.3 * 7
= 11.1%
Price = dividend next year/(Required return - growth rate)
= 2.3 * 1.055^8/(0.111-0.055)
= 63.03
choose A)
You find a stock with a beta of 1.3 that just paid a dividend of $2.30...
You find a stock with a beta of 1.3 that just paid a dividend of $1.45 that is expected to grow at 5%. If the risk-free rate is 3% and the market risk premium is 8%, what should be the price of the stock in four years? A. $22.03 B. $41.12 C. $20.98 D. $18.13
You find a stock with a beta of 1.3 that just paid a dividend of $1.45 that is expected to grow at 5%. If the risk-free rate is 3% and the market risk premium is 8%, what should be the price of the stock in four years? A. $20.98 B. $22.03 C. $18.13 D. $41.12
A stock with a beta of 1.2 just paid a dividend of $0.75 that is expected to grow at 7%. If the risk-free rate is 3% and the market risk premium is 5.5%, what should be the price of the stock in five years? A. $28.85 B. $43.29 C. $30.87 D. $40.46
Paunch Burger has a beta of 1.2 and just paid a dividend of $2.30 that is expected to grow at 3.2%. If the risk-free rate is 3% and the market risk premium is 6%, what should be the price of the stock? A. $69.81 B. $39.69 C. $32.86 D. $33.91
Dunder Mifflin has a beta of 1.8 and just paid a dividend of $1.50 that is expected to grow at 7% per year for the foreseeable future. If the risk-free rate is 3% and the market risk premium is 6%, what should be the price of their stock in seven years? A. $26.18 B. $37.90 OC. $35.42 O D. $23.60
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A stock with a beta of 1.3 just paid a dividend of $1.10 and is priced at $35. If the risk-free rate is 2% and the market risk premium is 6%, what is the expected growth rate for the stock? A. 4.08% B. 3,93% O G. 6.6% OD. 6.45%
Paunch Bruger has a beta of 0.8 and just paid a dividend of $1.25 that is expected to grow at 4%. If the risk-free rate is 3% and the market risk premium is 6%, what should be the price of the stock?
Apple has a beta of 0.92 and just paid a dividend of 54 cents per share. Its dividends are expected to grow at a rate of 11%. If the risk-free rate is 1.8% and the market risk premium is 14%, what is the fair price of a share of Apple stock
The Peter Inc just paid a dividend of $1.0 per share, and that dividend is expected to grow at a constant rate of 5.50% per year in the future. The company's beta is 1.15, the market risk premium is 5.00%, and the risk-free rate is 4.00%. What is Peter’s current stock price, P0?