Calculate the future value of stock

Reference no: EM1346087

A share of stock sells for $53 today. The beta of the stock is 1.2, and the expected return on the market is 12%. The stock is expected to pay a dividend of $1.10 in one year. If the risk- free rate is 5.5%, what will the share price be in one year?

Required return = 0.055 + [1.2 (0.12 - 0.055)]
0.055 + (1.2 * 0.065)
0.055 + 0.078
0.133

Reference no: EM1346087

Questions Cloud

What will be the index of refraction of the liquid : What would be the equilibrium temperature when a 271 g block of copper at 280°C is placed in a 169 g aluminum calorimeter cup containing 817 g of water at 11.5°C.

Calculate expected claim cost per policy : An insurer trade a very large amount of policies to people with the following loss distribution: $100,000 with probability 0.005;

What is the complete work on the crate : A factory worker pushes a 30kg crate a distance of 4.50 meters along a level floor at constant velocity by pushing it downward at an angle of 30degrees below the horizontal. The coefficient of kinetic friction between the crate and the floor is 0...

Examine firm success based on internet communication : Examine Firm Success Based on Internet Communication - On the basis of the discussion in the personal selling section about problems with internet communication

Calculate the future value of stock : A share of stock sells for 53 dollar today. The beta of the stock 1.2, & expected return on the market is 12 percent. The stock is expected to pay a dividend of 1.10 dollar in one year.

Writing application to accept loan amount-interest rate : Write down the application to accept a loan amount, annual interest rate, and loan period (in number of years) and displays a table with five columns.

Explain what is the short-run condition for the monopolist : EXplain what is the short-run condition for the monopolist and what output changes would you recommend.

Managing foreign exchange risk and pitfalls : Why're there gains from international diversification without hedging exchange-rate risk even by exchange rates contribute the substantial proportion of entire risk?

Important ways a pm can gather and analyze information : Show some of the important ways a PM can gather and analyze information and describe the value of informal communication methods when conducting and running a project

User Account

All Pages