AC&DC Company will be worth $135 per share one year from now. This company has a beta of 2.3. The risk-free rate is 5.5% and the market risk premium is 7.0%. Assuming CAPM holds and AC&DC does not pay dividends, how much are you willing to pay for one share today? Show your workings and round your final answer to two decimal places.

AC&DC Company will be worth $135 per share one year from now. This company has a beta of 2.3. The risk-free rate is 5.5% and the market risk premium is 7.0%. Assuming CAPM holds and AC&DC does not pay dividends, how much are you willing to pay for one share today? Show your workings and round your final answer to two decimal places.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter12: The Cost Of Capital

Section: Chapter Questions

Problem 19P

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