Assume that CAPM is valid. A share of stock is now selling for $155. It will pay a dividend of $6 per share at the end of the year. Its beta is 1. What do investors expect the stock to sell for at the end of the year? Assume the risk-free rate is 5% and the expected rate of return on the market portfolio is 20%. (Round your answer to 2 decimal places.) Expected selling price A
Assume that CAPM is valid. A share of stock is now selling for $155. It will pay a dividend of $6 per share at the end of the year. Its beta is 1. What do investors expect the stock to sell for at the end of the year? Assume the risk-free rate is 5% and the expected rate of return on the market portfolio is 20%. (Round your answer to 2 decimal places.) Expected selling price A
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
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Assume that CAPM is valid. A share of stock is now selling for $155. It will pay a dividend
of $6 per share at the end of the year. Its beta is 1. What do investors expect the stock to
sell for at the end of the year? Assume the risk-free rate is 5% and the expected rate of
return on the market portfolio is 20%. (Round your answer to 2 decimal places.)
Expected selling price
A
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