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Should purchase hayden stock

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Problem 1: Hayden Enterprise paid a dividend last year of $3.25, which is expected to grow at a constant rate of 7%. Hayden has a beta of 1.5 and their stock is currently selling for $62. If the market risk premium is 6% and the risk-free rate is 3%, should you purchase Hayden's stock? Why or Why not? Show by comparing the current selling price to a required or "equilibrium" price (based on CAPM) of Hayden.

Reference no: EM132645745

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