Stock is expected to pay dividend

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You are considering an investment in Crisp Cookware’s common stock. The stock is expected to pay a dividend of $2.50 a share at the end of this year (D1 = $2.50); its beta is 0.9; the risk-free rate is 5.6%; and the market risk premium is 6%. The dividend is expected to grow at some constant rate g; and the stock currently sells for $28 a share. Assuming the market is in equilibrium, what does the market believe will be the stock price at the end of 3 years (i.e., what is P3)?

Reference no: EM131084620

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