Determine the present value of the stock

Reference no: EM1366500

Next year dividend for ERT stock is expected to be $4. You expect it to be $4 in next two years, also, but then you expect it to increase at an 8% yearly rate forever. If the risk-free rate of interest is 1%, the expected market return is 9%, and the ERT's beta is 2.0 then what is the price of the stock, today?

Reference no: EM1366500

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