UML CO has a beta of 1.5, risk free rate is 2.5% and the market return is 6%. The current dividend (D0) is $1.50 and expect to grow at 5% per year constant, what is the UML stock price in three years (P3)?

UML CO has a beta of 1.5, risk free rate is 2.5% and the market return is 6%. The current dividend (D0) is $1.50 and expect to grow at 5% per year constant, what is the UML stock price in three years (P3)?

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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Question

UML CO has a beta of 1.5, risk free rate is 2.5% and the market return is 6%.
The current dividend (D0) is $1.50 and expect to grow at 5% per year
constant, what is the UML stock price in three years (P3)?

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