Investors expectation of price of the stock at end of year

Assignment Help Financial Management

Reference no: EM131836079

A share of stock with a beta of 0.74 now sells for $49. Investors expect the stock to pay a year-end dividend of $3. The T-bill rate is 5%, and the market risk premium is 8%. 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: EM131836079

Questions Cloud

Self-insurance and the disadvantages of self-insurance : Identify the reasons for self-insurance and the disadvantages of Self-Insurance

What are ethical issues and points of conflict in the case : What are the ethical issues and points of conflict in this case? Who are the interested parties affected by issues and what are their reasonable expectations?

Version of commodity international monetary system : As examined in class, the Gold Standard was a version of a commodity international monetary system.

What are specific investments and why are they risky : Vertical coordination can facilitate stronger customer-seller ties but at the same time may increase the risk to the customer's and supplier's specific

Investors expectation of price of the stock at end of year : 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?

Describe role of databases and database management systems : Creating a Database Design, the college has provided more information for the database - Discuss the degree to which you believe your diagram reflects

Review problem on elements of a chemical dependency : You have learned many of the basic elements of a chemical dependency center in today's world. Now it is time to write a report that will be used in a final.

Billy ordered two rooms of furniture from rooms-to-go : Billy ordered two rooms of furniture from Rooms-To-Go. Billy paid the full price of both rooms. When Rooms-To-Go delivered the furniture to Billy

Think about the impact of situated cognition on a k-12 : Think about the impact of situated cognition on a K-12 course when taught face-to-face as opposed to online.

User Account

All Pages