The current stock price is $40. The current dividend is $4 and dividends are expected to grow at a constant rate g. The beta of the stock is 1.2. The risk free rate is 5%, the expected market excess return is 6%. What is the growth rate g implied by the current valuation? Question 2 options: 0% 1% 2% 3% Something else.
The current stock price is $40. The current dividend is $4 and dividends are expected to grow at a constant rate g. The beta of the stock is 1.2. The risk free rate is 5%, the expected market excess return is 6%. What is the growth rate g implied by the current valuation? Question 2 options: 0% 1% 2% 3% Something else.
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
Related questions
Question
The current stock price is $40. The current dividend is $4 and dividends are expected to grow at a constant rate g. The beta of the stock is 1.2. The risk free rate is 5%, the expected market excess return is 6%.
What is the growth rate g implied by the current valuation?
Question 2 options:
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0% |
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1% |
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2% |
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3% |
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Something else.
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