Suppose the dividends for the Seger Corporation over the past six years were $1.40, $1.48, $1.57, $1.65, $1.75, and S Assume that the historical (arithmetic) average growth rates will remain the same for 2022. Compute the expected = end of 2022 using the perpetual growth method. Assume the market risk premium is 11.7 percent, Treasury bills ylele the projected beta of the firm is 0.88. Note: Do not round Intermediate calculations. Round your answer to 2 decimal places. Answer is complete but not entirely correct. Share price 1.80 x S

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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Suppose the dividends for the Seger Corporation over the past six years were $1.40, $1.48, $1.57, $1.65, $1.75, and $1.80, respectively.
Assume that the historical (arithmetic) average growth rates will remain the same for 2022. Compute the expected share price at the
end of 2022 using the perpetual growth method. Assume the market risk premlum is 11.7 percent, Treasury bills yield 5.9 percent, and
the projected beta of the firm is 0.88.
Note: Do not round Intermediate calculations. Round your answer to 2 decimal places.
Answer is complete but not entirely correct.
Share price
S
1.80
Transcribed Image Text:Suppose the dividends for the Seger Corporation over the past six years were $1.40, $1.48, $1.57, $1.65, $1.75, and $1.80, respectively. Assume that the historical (arithmetic) average growth rates will remain the same for 2022. Compute the expected share price at the end of 2022 using the perpetual growth method. Assume the market risk premlum is 11.7 percent, Treasury bills yield 5.9 percent, and the projected beta of the firm is 0.88. Note: Do not round Intermediate calculations. Round your answer to 2 decimal places. Answer is complete but not entirely correct. Share price S 1.80
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