[Questions 15-16] The stock is expected to pay a dividend of $0.8 per share in year 1. Since then,dividends are expected to grow at 6% every year forever. What is the stock price?$16.0 per share$26.7 per share$40.0 per share$80.0 per share [Questions 15-16] Consider a stock of which beta is 1.5. The risk-free rate is 2%, and the market riskpremium is 6%. According to the CAPM, what is the expected return on the stock?OO7%8%9%11%

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Description: [Questions 15-16] The stock is expected to pay a dividend of $0.8 per share in year 1. Since then,dividends are expected to grow at 6% every year forever. What is the stock price?$16.0 per share$26.7 per share$40.0 per share$80.0 per share [Question

beta = b = 1.5 Risk free rate = rf = 2% market risk premium = mrp = 6%

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[Questions 15-16] The stock is expected to pay a dividend of $0.8 per share in year 1. Since then, dividends are expected to grow at 6% every year forever. What is the stock price? O $16.0 per share O $26.7 per share $40.0 per share O $80.0 per share

[Questions 15-16] The stock is expected to pay a dividend of $0.8 per share in year 1. Since then, dividends are expected to grow at 6% every year forever. What is the stock price? O $16.0 per share O $26.7 per share $40.0 per share O $80.0 per share

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 2P: AA Corporations stock has a beta of 0.8. The risk-free rate is 4%, and the expected return on the...

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