Financial accounting question Human's Inc.'s last dividend was $1.50 and itsearnings and dividends are expected to increaseat a constant growth rate of 4%. Humana'smarket beta is 1.8. If the current risk-free rate is5% and the required rate of return on the marketportfolio is 12%, what is the company's currentexpected stock price?a. $7.50b. $9.58c. $11.47d. $17.89

Step 1: Define Dividend Growth ModelThe dividend growth model is a popular method used by investors…

Answered: Human's Inc.'s last dividend was $1.50…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 16MC

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The Francis Company is expected to pay a dividend of D₁ = $1.25 per share at the end of the year, and that dividend is expected to grow at a constant rate of 6.00% per year in the future. The company's beta is 0.85, the market risk premium is 5.50%, and the risk-free rate is 4.00%. What is the company's current stock price? Do not round intermediate calculations. a. $51.40 b. $47.66 c. $49.53 d. $46.73 e. $54.21
The Francis Company is expected to pay a dividend of D1 = $1.25 per share at the end of the year, and that dividend is expected to grow at a constant rate of 6.00% per year in the future. The company's beta is 0.85, the market risk premium is 5.50%, and the risk-free rate is 4.00%. What is the company's current stock price? Do not round intermediate calculations. options: $49.53 $54.21 $46.73 $47.66 $51.40

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