At what price should the stock of preston sell

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Question - The stock of the Preston Corporation is expected to pay a dividend of $6 during the coming year. Dividends are expected to grow far into the future at 8%. Investors have recently evaluated future market return variance to be 0.0016 and the covariance of returns for Preston and the market as 0.00352. Assuming a required market return of 14% and a risk-free rate of 6%, at what price should the stock of Preston sell?

Reference no: EM132745990

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