A stock with a beta of 1.8 just paid a dividend $1.60 that is expected to grow at 6%. If the risk-free rate is 2% and the market risk premium is 5.5%, what should be the price of the stock today? A. $28.75. B. $27.12. C. $27.12. D. $69.57.

A stock with a beta of 1.8 just paid a dividend $1.60 that is expected to grow at 6%. If the risk-free rate is 2% and the market risk premium is 5.5%, what should be the price of the stock today? A. $28.75. B. $27.12. C. $27.12. D. $69.57.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 2P: AA Corporations stock has a beta of 0.8. The risk-free rate is 4%, and the expected return on the...

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Need help with this financial accounting question

A stock with a beta of 1.8 just paid a dividend $1.60 that is
expected to grow at 6%. If the risk-free rate is 2% and the
market risk premium is 5.5%, what should be the price of the
stock today?
A. $28.75.
B. $27.12.
C. $27.12.
D. $69.57.

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