Question: PLEASE SHOW ANSWER IN EXCEL You are considering the purchase of a new stock. The stock is forecasted to pay a dividend next year (D1)

PLEASE SHOW ANSWER IN EXCEL PLEASE SHOW ANSWER IN EXCEL You are considering the purchase of a

You are considering the purchase of a new stock. The stock is forecasted to pay a dividend next year (D1) of $3.67. In addition, you forecast that the firm will have a stable growth rate of 4.5% for the foreseeable future. The current risk-free rate of return is 2.8%. The expected return on the market is 7.6% and the standard deviation for the market is 12%. The stock has a correlation to the market of 0.59. Finally, the stock has a standard deviation of 53%. Given this information, what is the value of the stock? (Hint -- it is a constant growth situation)

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