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A company is expected to have earnings of $3.03 per share next year, $4.28 in two years, and $5.79 in three years. The dividend payout ratio is expected to remain at 40% over the next three years. You estimate the risk-free rate to be 4% per year and the expected market risk premium to be 6% per year. In two years, you expect the lagging PE ratio to be 16. The beta of the stock is 1.3. What would be an appropriate estimate of the stock price today?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92167352

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