If the risk-free rate is 5%, the expected market return is 10%, the beta of the firm is 2, the current dividend is 1 and dividends are expected to grow at a rate of 10% per year, what price should the firm's stock be trading at? Question 2 options: P= 1/.1 = $10 P= 1.1 /.15 = $7.33 P= 1.1 /.10 = $11

If the risk-free rate is 5%, the expected market return is 10%, the beta of the firm is 2, the current dividend is 1 and dividends are expected to grow at a rate of 10% per year, what price should the firm's stock be trading at? Question 2 options: P= 1/.1 = $10 P= 1.1 /.15 = $7.33 P= 1.1 /.10 = $11

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter12: The Cost Of Capital

Section: Chapter Questions

Problem 22P

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