A stock with a beta of 0.6 just paid a dividend of $5.60 and is priced...

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A stock with a beta of 0.6 just paid a dividend of $5.60 and is priced at $250.00. If the risk-free rate is 2% and the market

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Answer 1

Answer #1

Expected growth rate for the stock is given as equal to=(Current Price*(risk free rate+beta*market risk premium)-Last Dividend)/(Current Price+Last Dividend)=(250*(2%+0.6*6%)-5.60)/(250+5.60)=3.2864%

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