Assume that the risk-free rate of interest is 4% and the expected rate of return on the market is 16%. A share of stock sells for $63 today. It will pay a dividend of $3 per share at the end of the year. Its beta is 1.1. What do investors expect the stock to sell for at the end of the year?

Expected Stock Price:

Answer rating: 100% (QA)

To find the expected stock price at the end of the year we can use the dividend discount model DDM c... View the full answer