Assuming the market is in equilibrium

Reference no: EM13256245

Crisp cookware’s common stock is expected to pay a dividend of $3 a share at the end of the year (D1 = $3.00), and its betta is 0.8; the risk-free rate is %5.2; and the market risk premium is %6. The dividend is expected to grow at some constant rate g, and the stock currently sells for $40 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 P3)

Aman Gupta - in the solution how did you find out D4 = 3

Reference no: EM13256245

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