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Find what must be investors expectation of price of stock

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Reference no: EM132987327

Problem 1: A share of stock with a beta of 0.71 now sells for $46. Investors expect the stock to pay a year-end dividend of $3. The T-bill rate is 4%, and the market risk premium is 7%. If the stock is perceived to be fairly priced today, what must be investors' expectation of the price of the stock at the end of the year?

Reference no: EM132987327

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