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(Stocks) A stock with a beta of 0.52 is expected to pay a $1.39 dividend over...

(Stocks) A stock with a beta of 0.52 is expected to pay a $1.39 dividend over the next year. The dividends are expected to grow at 1.1% per year forever. What is the stock's value per share (to the nearest cent, no $ symbol) if the risk-free rate is 0.79 and the market risk premium (i.e., the difference between the market return and the risk-free rate) is 5.71%?

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Answer #1

As per CAPM =

= 0.79 + 0.52( 5.71%)

= 3.7592% OR 3.76%

Value of Share =  

=

= 52.2556390977 OR $ 52.26

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