Timco has paid 2.50 per share to the preferred shareholders each year for the past 20 years.

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Timco has paid 2.50 per share to the preferred shareholders each year for the past 20 years. We believe this will continue forever. Timco has a beta of 1.7, the risk free rate is 2% and the market is expected to earn 11%.

What would be a fair price for the Timco stock?

Related Book For answer-question

Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

ISBN: 978-1337614689

9th edition

Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

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Posted Date: Apr 11, 2023 01:50 AM

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Timco has paid 2.50 per share to the preferred shareholders each year for the past 20 years.

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Expert Answer:

To calculate the fair price of Timco stock we need to use the dividend discount model DDM which valu... View the full answer

Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

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