The price the investors are willing to pay for a share of Bouchard Company's stock is $20. Investors expect its dividends to grow at a constant rate, 6%, forever. The stock's beta is 1.3, the market risk premium is 7% and the risk-free rate is 3%. What will be the dividend on the stock next year(D1)?

(Hint: use CAPM to compute the cost of equity )

Answer rating: 100% (QA)

To find the dividend on the stock next year D1 we need to first calculate the cos... View the full answer