Paramount Company's stock is expected to generate a dividend and terminal value one year from now of P57.00. The stock has a beta of 1.3, the risk-free interest rate is 6 percent, and the expected return market return is 11 percent. What should the equilibrium price of Investors' stock in the market now? a. P53.77 b. P41.22 c. P50.67 d. P43.85
Paramount Company's stock is expected to generate a dividend and terminal value one year from now of P57.00. The stock has a beta of 1.3, the risk-free interest rate is 6 percent, and the expected return market return is 11 percent. What should the equilibrium price of Investors' stock in the market now? a. P53.77 b. P41.22 c. P50.67 d. P43.85
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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Paramount Company's stock is expected to generate a dividend and terminal value one year from now of P57.00. The stock has a beta of 1.3, the risk-free interest rate is 6 percent, and the expected return market return is 11 percent. What should the
a.
P53.77
b.
P41.22
c.
P50.67
d.
P43.85
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