Question: if u can do it in excel please do it if not then solve it ABC stock is expected to pay no dividends for the
if u can do it in excel please do it
if not then solve it
ABC stock is expected to pay no dividends for the first three years, i.e., D1 = $0, D2 = $0, and D3 = $0.The dividend for Year 4 is expected to be $5.00 (i.e., D4 = $5.00), and it is anticipated that the dividend will grow at a constant rate of 5 percent a year thereafter.The required rate of return is 13%.
a-Assuming the stock is fairly priced, what is the current price of the stock?
b- The required rate of return for the security ABC is 13%. The risk- free rate is 7% and the market average return is 12%.
c-What is the beta of the ABC? Is the stock more risky or less risk than the market? Explain your answer.
d-Will you buy the ABC stock if it is sold in the market for $52?
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