A share of stock with a beta of 0.69 now sells for $44. Investors expect the stock to pay a year-end dividend of $4. The T-bill rate is 6%, and the market risk premium is 9%. If the stock is perceived to be fairly priced today, what must be investors’ expectation of the price of the stock at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Q: A stock is expected to pay a dividend of $2.5 one year from now, and the same amount every year…

A: Dividend = 2.50 Required return = 11.60% No growth rate and Dividend is same in every Year then,…

Q: A share of common stock just paid a dividend of $1.2. If the expected long-run growth rate for this…

A: Current Dividend  $            1.20 Rate of return 10.70% Growth Rate 1.00%     Share Price…

Q: A firm is expected to pay a dividend of $2.35 next year and $2.50 the following year. Financial…

A: The value which is determined by how much someone is willing to pay for it is the value of the…

Q: A stock is currently priced at $41.93.  Its dividend is expected to grow at a rate of 5.5%…

A: Given that;Current price is $41.93Dividend growth rate is 5.5%Required return is 11.1%

Q: A stock is currently selling for $80, pays a dividend of $3.00. Dividends are expected to grow at a…

A: given data stock price (P) = $80 dividend (D) = $3 growth rate (g) = 2% required rate of return (k)…

Q: A stock is expected to pay its first $2.9 dividend in 5 years from now (t=5). The dividend is…

A: Using Gordon's growth model we can determine the price at time 5 and then use a FV formula to…

Q: The stock price of XYZ Co. is $24.49. Investors require an 6.53 percent rate of return on similar…

A:

Q: Assume that the risk-free rate of interest is 3% and the expected rate of return on the market is…

A: The value which is determined by how much someone is willing to pay for it is the value of the…

Q: A share of stock with a beta of 0.8 currently sells for $50. Investors expect the stock to pay a…

A: Expected Return = Risk free rate + Market risk premium * Beta

Q: are of stock with a beta of 0.78 currently sells for $53. Investors expect the stock to pay a…

A: The price of stock can be found out from the dividend growth discount model based on required rate…

Q: You plan to buy a stock at a price of $190.8 today.  The stock does not yet pay a dividend and you…

A: The overall return on investment from income and asset growth over a period of time is known as the…

Q: = $4.75 next year, and your advisory service tells you -$79. The stock's beta is 1.5, r, is 4%, and…

A: Answer : Abnormal return : Abnormal return = Required rate of return - return expected to be earned…

Q: Investors expect the market rate of return this year to be 16.50%. The expected rate of return on a…

A: In the given case, we have provided the expected market return rate, beta and the expected…

Q: A stock is currently priced at $39.5.  Its dividend is expected to grow at a rate of 6.4% per year…

A: Here, The stock price in year 4 is P4. The Stock price in year 0 is P0 i.e. $39.5. The growth rate…

Q: share of stock with a beta of 0.75 now sells for $50. Investors expect the stock to pay a year-end…

A: Stock Beta=0.75T-bill Rate=4%Risk Premium=7%Dividend=2Selling Price at the end of the…

Q: Given the following information from Ivanhoe Corporation, what price would the CAPM predict that the…

A: When the company receives profits and distributes them among the shareholders. That share of profit…

Q: Gen Corporation is expected to pay a dividend of $3.50 per year indefinitely. The appropriate rate…

A: Expected dividend = $3.50Rate of return = 11%Ex-dividend =35 days before the dividend payment date

Q: A stock just paid $3.2 dividend yesterday. The dividend is expected to grow at 2.0% per year…

A: Stock price is the selling price at which the stock trades on an exchange. It is the price which the…

Q: A stock is expected to pay a dividend of $1.26 at the end of the year. The required rate of return…

A: Formula: Current stock = Expected dividend/(Required rate - Growth rate)

Q: Over the coming year, Ragwort’s stock price will halve to $75 from its current level of $150 or it…

A: The risk-neutral probability of a stock refers to the probability of each outcome of the price of…

Q: Your broker has recommended that you purchase stock in Alacan, Inc. She estimates that the 1-year…

A: Cost of equity = Rf + Beta * ( Rm - Rf ) = 2.70% + 0.91 * 9.50% = 2.70% + 8.645% = 11.345%

Q: The stock price of XYZ Co. is $21.72. Investors require an 9.91 percent rate of return on similar…

A: It is a valuation model, that calculates the fair value of stock, assuming that the dividends grow…

Q: please provide detailed solution and the explanation of the concept...

A: Detailed explanation: To find the exercise price KKK that leaves you indifferent between holding the…

Q: What is the Sharpe Ratio for a stock priced at $80 that is expected to receive $2 in dividends and…

A: Sharpe ratio shows the risk adjusted performance of a stock and it shows how much risk is involved…

Q: The current price of a non-dividend-paying stock is $30. Over the next six months it is expected to…

A: Formula of risk neutral probability is :   p  =  erT  -  du  -  dwhere,p =risk neutral probability…

Q: What is the required rate of return on AA's stock?

A: Required rate of return (RRR) is the least required rate at which an investor will agree to invest…

Q: Consider a stock currently trading at $10, with expected annual return of 15% and annual volatility…

A: Current Stock price is $10 Expected annual return is 15% Annual Volatility is 0.2 To Find:…

Q: A share of stock sells for $45 today. The beta of the stock is 1.7 and the expected return on the…

A: The price of stock can be found out from the dividend discount model based on the constant growth of…

Q: You expect a stock to pay annual dividends of $1.39. $1.16, and $1.87 in each of the next three…

A: The price of a stock is equal to the present value of the expected dividend and the terminal value.

Q: Suppose a stock price can go up by 15.25% or down by 13.25% over the next year. You own a one-year…

A: Data given : Stock price can go up by 15.25% Stock price can go down by 13.25% Interest rate is 11%…

Q: Please answer both A stock is currently selling for $90.83 and is expected to sell for $102.27 in 1…

A: Holding Period Return (HPR) is a financial metric that quantifies the total return on an investment…

Q: You are evaluating a stock that just paid a dividend of S4.6. Dividends are expected to grow at a…

A: This Question is based on dividend discount model. We are required to calculate the value of stock…

Q: Crisp Cookware's common stock is expected to pay a dividend of $2.75 a share at the end of this year…

A: Dividend discount model is based on the concept of time value of money.The dividend discount model…

Q: The stock price of Alps Co. is $53.20. Investors require a return of 14 percent on similar stocks.…

A: Current price of stock is the price which can be paid for purchase of the stock. It is also called…

Q: A stock with a beta of 1.2 has an expected rate of return of 14%. If the market return this year…

A: Stock return = Expected rate of return + beta (Market premium)

Q: A stock is currently selling for $97.84 and is expected to sell for $107.31 in 1 year. If the…

A: We are given that:P1 (Price after one year) = $107.31P0 (current price) = $97.84D (Dividend income)…

Q: Suppose that you are willing to pay $450.33 today for a share of stock which you expect to sell at…

A: Buying price = $450.33 Selling price = $500.25 Annual rate of return = 15%

Q: A share of stock with a beta of 0.71 now sells for $61. Investors expect the stock to pay a year-end…

A: The beta of the stack is a measure of how the stock is expected to change when there is a change in…

Q: estimate that the stock has a required rate of 18%. What is the intrinsic value of this stock?

A: The constant growth model is a stock valuation method used in finance to determine a stock's…

Q: Crisp Cookware's common stock is expected to pay a dividend of $2.5 a share at the end of this year…

A: Dividend per share (D1) = $2.5 Beta = 0.6 Risk-free rate = 2.8% Market risk premium = 6% Current…

Q: What should be the market price of the stock?   $     If the current market price of the stock is…

A: Share Price: The price of a share is an indication of its present value to buyers and sellers.…

Q: Suppose the risk-free rate of return is 4.5 percent and the market risk premium is 8 percent. Stock…

A: Risk free rate = 4.5%  Market risk premium = 8% The beta of stock U = 1.3  The selling price of…

Q: The current price of a non-dividend-paying stock is $30. Over the next six months it is expected to…

A: Data given: S0=$30  u=$36/$30 = 1.2 d=$26 /$30=0.866667 R=Risk free rate=0%   Required: Risk neutral…

Q: stock is expected to pay a dividend of $1.50 at the end of the year (i.e., D1 = $1.50), and it…

A: In this we have to use dividend discount model to calculate the price of stock.