A company is expected to pay a dividend of $3.00 at the end of year 1 and this dividend is expected to grow at an annual rate of 4% forever. The company's beta has been estimated as 1.4. The market risk premium is expected to be 8% p.a. and the riskfree rate is 4% p.a.

 

i) Based on the CAPM, estimate the company's share price today. 

Answer rating: 100% (QA)

To estimate the companys share price today using the Capital Asset Pricing Mo... View the full answer