A stock has a beta of 0.85, the risk-free rate is 2.99% and the market premium is

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A stock has a beta of 0.85, the risk-free rate is 2.99% and the market premium is 3.92%. The stock will pay a $2.87 as dividend for 30 years (starting a year from now) and after that nothing (firm will liquidate). What is the price of the stock?

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Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

ISBN: 978-1285190907

8th edition

Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

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Posted Date: Aug 30, 2023 07:03 AM

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A stock has a beta of 0.85, the risk-free rate is 2.99% and the market premium is

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Expert Answer:

To calculate the price of the stock in full detail and steps we can use the Dividend Discount Model DDM and the Capital Asset Pricing Model CAPM Heres ... View the full answer

Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

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