Calculate new equilibrium price of the stock

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Reference no: EM1365231

A common stock currently has a beta of 1.3, the risk factor is an annual 6 percent, and the market return is an annual rate of 12 percent. The stock is expected to generate per-share benefits of $5.20 during the coming period. A toxic spill results in a lawsuit and potential fines, and beta of the stock jumps 1.6. The new equilibrium price of the stock

Reference no: EM1365231

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