Middlefield Motors stock is expected to be priced at 89.67 dollars in 1 year. It is expected to pay its next dividend, which is expected to be 2.28 dollars, in 1 year. The stock has a beta of 0.47. The market has an expected return of 12.56 percent, the risk-free rate is 4.32 percent, and the inflation rate is 2.32 percent. What is the current price of Middlefield Motors stock?

Answer rating: 100% (QA)

We can use the Capital Asset Pricing Model CAPM to calculate the current price of Middlefield Motor... View the full answer