The annual risk-free rate of return is 2% and the investor believes that the market will rise annually at 7%. If a stock has a beta coefficient of 1.5 and its current dividend is $1, what should be the value of the stock if its earnings and dividends are growing annually at 4%?

Answer rating: 100% (QA)

At first we will find the cost of equity for the firm using Capital ... View the full answer