Assuming the market is in equilibrium illustrate what does, Ask an Expert

Management Studies

Q. You are considering an investment in Keller Corp's stock, which is expected to pay a dividend of $2.00 a share at the end of the year (D1=$2.00) also has a beta of 0.9. The risk-free rate is 5.6% also the market risk premium is 6%. Keller currently sells for $25.00 a share also its dividend is expected to grow at some constant rate g. Assuming the market is in equilibrium, illustrate what does the market believe will be the stock price at the end of 3 years? That is, illustrate what is P3?

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Business Management, Management Studies

Category:- Business Management
Reference No.:- M9354262

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