A share of stock is now selling for $100. It will pay a dividend of $9 per share at the end of the year. Its beta is 1. What must investors expect the stock to sell for at the end of the year? Assume the risk-free rate is 8% and the expected rate of return on the market is 18%. Expected selling price
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- A stock is trading at $80 per share. The stock is expected to have a yearend dividend of $4 per share (D1 = $4), and it is expected to grow at some constant rate, g, throughout time. The stock’s required rate of return is 14% (assume the market is in equilibrium with the required return equal to the expected return). What is your forecast of gL?Now assume that the stock is currently selling at $30.29. What is its expected rate of return?You are thinking of buying a stock priced at $100 per share. Assume that the risk-free rate is about 4.5% and the market risk premium is 6%. If you think the stock will rise to $117 per share by the end of the year, at which time it will pay a $1 dividend, what beta would it need to have for this expectation to be consistent with the CAPM?
- A stock is currently selling for $18 with a beta of 1.6. They are expected to pay a dividend of $0.50 next year. If the risk-free rate is 2% and the market risk premium is 6%, what price will the stock have to reach next year to meet your required return?Assume that the risk-free rate of interest is 6% and the expected rate of return on the market is 16%.A share of stock sells for $50 today. It will pay a dividend of $6 per share at the end of the year. Its beta is 1.2. What do investors expect the stock to sell for at the end of the year?A share of stock is now selling for $95. It will pay a dividend of $5 per share at the end of the year. Its beta is 1. What do Investors expect the stock to sell for at the end of the year? Assume the risk-free rate is 5% and the expected rate of return on the market is 19%. (Round your answer to 2 decimal places.) Expected selling price
- You are thinking of buying a stock priced at $98 per share. Assume that the risk-free rate is about 4.7% and the market risk premium is 5.5%. If you think the stock will rise to $122 per share by the end of the year, at which time it will pay a $1.74 dividend, what beta would it need to have for this expectation to be consistent with the CAPM? The beta is (Round to two decimal places.)An investor is considering a stock worth Rs.555 per share today that pays a 9% annual dividend .The stock has a beta compared to the market of 1.5, which means it is riskier than a market portfolio. Also, assume that the risk-free rate is 2% and this investor expects the market to rise in value by 8% per year. Calculate the expected return for the stock or how much the expected earnings of investor by investing in this stock?You are considering an investment in Crisp Cookware’s common stock. The stock is expected to pay a dividend of $2 a share at the end of this year (D1 = $2.00); its beta is 0.9; the risk-free rate is 5.6%, and the market risk premium is 6%. The dividend is expected to grow at some constant rate g, and the stock currently sells for $25 a share. Assuming the market is in equilibrium, what does the market believe will be the stock’s price at the end of 3 years (i.e., what is P3)?
- ← You are thinking of buying a stock priced at $109.31 per share. Assume that the risk-free rate is about 4.03% and the market risk premium is 6.48%. If you think the stock will rise to $118.76 per share by the end of the year, at which time it will pay a $3.48 dividend, what beta would it need to have for this expectation to be consistent with the CAPM? The beta is (Round to two decimal places.) ...Visa, Inc. (V) has a beta of 1.08, is selling for $56.72, and will pay a $2.35 dividend at the end of the year. If the stock is priced at $57.15 at year-end, it is __________, so __________ it. Assume the risk-free rate is 3.05%, and the expected market return is 3.92%. A. underpriced / sell B. underpriced / buy C. overpriced / sell D. fair-valued / holdOne year from nowAlafaya is expected to have a price of $69.0. The firm pays an annual dividend of $14.00 and the stock's beta is 1,33. The current risk-free rate is 2.00% and the market return is 11.60. What is the intrinsic value of this stock?