Question: Using the constant growth model, value the stock below with CAPM: Beta =1.4 risk free rate = Rf = 2% market risk premium = Rm-

Using the constant growth model, value the stock below with CAPM:

Beta =1.4

risk free rate = Rf = 2%

market risk premium = Rm- Rf = 10%

Projected dividend per share for next period = $3

Payout ratio = .6

ROE is expected to stay stable at 20%.

Please show work for estimating the value.

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