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Problem:

Assume the risk free rate is 6 percentage and the market risk premium is 6 percentages. The stock of physician care network is(PCN) has a beta of 1.5. The last dividend paid by PCN (D0) was $2 per share. a. What would be PCN's stock value be if the dividend was expected to grow at a constant; -5%,0%5% 10% b.

Required:

What would be the stock value if the growth rate is 10 percentage, but PCN's beta falls to 1.0, 0.5?

Please explain in detail.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91147420

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