Stetsons common stock is expected to pay a dividend of 25 a, Ask an Expert

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Stetson's common stock is expected to pay a dividend of $2.5 a share at the end of this year (D1 = $2.50); its beta is 0.80. The risk-free rate is 5.4% and the market risk premium is 5%. The dividend is expected to grow at some constant rate gL, and the stock currently sells for $35 a share. Assuming the market is in equilibrium, what does the market believe will be the stock's price at the end of 3 years (i.e., what is )? Do not round intermediate steps. Round your answer to the nearest cent.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92861879

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