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. O a. $51.40 O b. $47.66 O c. $49.53 O d. $46.73 Oe. $54.21

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
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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
Transcribed Image Text: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
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