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28 Sep 2019
1. The XYZ company is expected to pay a dividend of $2.00 per share at the end of the year, and that dividend is expected to grow at a constant rate of 3.00% per year in the future. The companyâs beta is 1.1, the market risk premium is 6.0%, and the nominal risk-free rate is 4.00%.
(1) What is the fundamental price of the stock?
(2) What is the stock's expected return ?
1. The XYZ company is expected to pay a dividend of $2.00 per share at the end of the year, and that dividend is expected to grow at a constant rate of 3.00% per year in the future. The companyâs beta is 1.1, the market risk premium is 6.0%, and the nominal risk-free rate is 4.00%.
(1) What is the fundamental price of the stock?
(2) What is the stock's expected return ?
experttutorLv10
14 Nov 2022
Jamar FerryLv2
28 Sep 2019
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Cartwright Brothersâ stock is currently selling for $40 a share.The stock is expected to pay a $4 dividend at the end of the year.The stockâs dividend is expected to grow at a constant rate of 7percent a year forever. The risk-free rate (kRF) is 7 percent andthe market risk premium (kM â kRF) is 5 percent. What is thestockâs beta?
| a. | 5.00 | |
| b. | 1.00 | |
| c. | 2.00 | |
| d. | 3.00 | |
| e. | 4.00 |
