Assume that the risk-free rate of interest is 3% and the expected rate of return on the market is 16%. A share of stock sells for $70 today. It will pay a dividend of $5 per share at the end of the year. Its beta is 1.3. What do investors expect the stock to sell for at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Expected stock price
Assume that the risk-free rate of interest is 3% and the expected rate of return on the market is 16%. A share of stock sells for $70 today. It will pay a dividend of $5 per share at the end of the year. Its beta is 1.3. What do investors expect the stock to sell for at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Expected stock price
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 the risk-free rate of interest is 3% and the expected rate of return on the market is 16%. A share of stock sells for $70
today. It will pay a dividend of $5 per share at the end of the year. Its beta is 1.3. What do investors expect the stock to sell for at the
end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Expected stock price
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