Zombie manufacturing company is expected to pay a dividend, Ask an Expert

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Zombie Manufacturing Company is expected to pay a dividend of $4.63 in the upcoming year. Dividends are expected to grow at 6.4% per year. The risk-free rate of return is 2%, and the expected return on the market portfolio is 8.6%. Investors use the CAPM to compute the market capitalization rate and use the constant-growth dividend discount model to determine the value of the stock. The stock's current price is $96. What is your estimate for the market capitalization rate of this asset?

Enter answer in percents to two decimal places.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92781608

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