Question: Using the proper formula 6. Based on the historical performance of Strava Corporation, you expect earnings and dividends to grow at a constant rate of

Using the proper formula 6. Based on the historical performance of Strava Corporation, you expect earnings and dividends to grow at a constant rate Using the proper formula

6. Based on the historical performance of Strava Corporation, you expect earnings and dividends to grow at a constant rate of 9%. You are considering buying this stock at its current market price of $80. Based on a beta of 0.6, you would require a return of 17% on this stock. The stock is expected to pay a dividend of $5. How much should you pay for this stock? (2) r- pini P1 Po +D r= rs = Pre + B(rm - rrf) V = D1 f = Da+g rs-g P Kat = Kbt * (1 T). WACC = -

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