Current Price Beta Market Risk Premium $50 1.5 5.52% Expected Price in 1 year Expected Dividend T-year T Bond yield What is the stock's alpha? Convert to a percent and then use 2 decimal places. $56.04 $1.94 0.679% QUESTION 4 A mature company will pay a dividend of $3.82 next year and those dividends are expected to grow at 1.78% forever. If the required return is 11.18%, what is the fair value of the stock today?

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
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QUESTION 3
Current Price
Beta
Market Risk Premium
$50
1.5
5.52%
Expected Price in 1 year
Expected Dividend
T-year T Bond yield
What is the stock's alpha? Convert to a percent and then use 2 decimal places.
$56.04
$1.94
0.679%
QUESTION 4
A mature company will pay a dividend of $3.82 next year and those dividends are expected to grow at 1.78% forever. If the
required return is 11.18%, what is the fair value of the stock today?
Transcribed Image Text:QUESTION 3 Current Price Beta Market Risk Premium $50 1.5 5.52% Expected Price in 1 year Expected Dividend T-year T Bond yield What is the stock's alpha? Convert to a percent and then use 2 decimal places. $56.04 $1.94 0.679% QUESTION 4 A mature company will pay a dividend of $3.82 next year and those dividends are expected to grow at 1.78% forever. If the required return is 11.18%, what is the fair value of the stock today?
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