A common stock is expected to generate an end-of-period dividend of $5 and an end-of-period price of
Fantastic news! We've Found the answer you've been seeking!
Question:
A common stock is expected to generate an end-of-period dividend of $5 and an end-of-period price of $62. If this security has a beta coefficient of 1.3, the risk-free interest rate is 10%, and the expected return on the market portfolio is 19%, then what is the value of this security today?
a. $55.50
b. $59.98
c. $55.05
d. $56.30
Related Book For
Fundamentals of corporate finance
ISBN: 978-0470876442
2nd Edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
Posted Date: