A stock has the following data: o Current cash flow per share: $ 10 o Growth rate
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Question:
A stock has the following data:
o Current cash flow per share: $ 10
o Growth rate for the next three years: 30%
o Long term growth rate after 3 years: 5%
o It pays a dividend 20% of cash flow every year.
o The current risk free rate= 1.62%; Return of the market = 15%
o The stock's beta = 1.5
Using the above data and CAPM to calculate its stock price.
Related Book For
Intermediate Accounting Volume 2
ISBN: 9781260881240
8th Edition
Authors: Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell, Ingrid McLeod-Dick, Kayla Tomulka, Romi-Lee Sevel
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