2) a) The following information is given. The expected rate of return of the index in next year is 30%, current annual rate of return of T-Bills is %15. We consider a stock whose beta is 1.2. It is estimated that this firm will pay a dividend per share of 2 TL next year. Investors predict that dividends will grow at the constant rate of 15% in future years. Then what may be the fundamental price of that stock? b) Will you consider to buy that stock if its current market value is 12.4 TL per share?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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2) a) The following information is given. The expected rate of return of the index in next year is 30%, current annual rate of
return of T-Bills is %15. We consider a stock whose beta is 1.2. It is estimated that this firm will pay a dividend per share of 2 TL
next year. Investors predict that dividends will grow at the constant rate of 15% in future years. Then what may be the
fundamental price of that stock?
b) Will you consider to buy that stock if its current market value is 12.4 TL per
share?
21 In th e problom obove (guection 21: lot us acGumo thet invoctore rothor then orodicting ono arowb rote of 159 -prodict two
Transcribed Image Text:2) a) The following information is given. The expected rate of return of the index in next year is 30%, current annual rate of return of T-Bills is %15. We consider a stock whose beta is 1.2. It is estimated that this firm will pay a dividend per share of 2 TL next year. Investors predict that dividends will grow at the constant rate of 15% in future years. Then what may be the fundamental price of that stock? b) Will you consider to buy that stock if its current market value is 12.4 TL per share? 21 In th e problom obove (guection 21: lot us acGumo thet invoctore rothor then orodicting ono arowb rote of 159 -prodict two
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