A stock has just paid a $0.50 dividend from earnings per share of $1.50. The stock's...

 

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A stock has just paid a $0.50 dividend from earnings per share of $1.50. The stock's beta is 0.8, the risk-free rate is 1.25% and the expected return on the market is 8%. If the dividend is expected to grow at a constant rate, what is the price of the stock today? What do you expect the price to be in 1 year? A stock has just paid a $0.50 dividend from earnings per share of $1.50. The stock's beta is 0.8, the risk-free rate is 1.25% and the expected return on the market is 8%. If the dividend is expected to grow at a constant rate, what is the price of the stock today? What do you expect the price to be in 1 year?

Answer rating: 100% (QA)

We can use the Gordon Growth Model GGM to estimate the current and future price of the stock Heres t... View the full answer