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Beta and Value A firm is expected to pay an annual dividend of $.60 next year. After next year the firms dividends will grow

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Answer #1

Answer: Overpriced by 4.79, Overpriced by 4.36

Using Value Line

Price should be

=0.60/(2.8%+1.51*4.8%-3%)

=8.51

Overpriced by 13.30-8.51=4.79

Using Yahoo

Price should be

=0.60/(2.8%+1.44*4.8%-3%)

=8.94

Overpriced by 13.30-8.94=4.36

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