Stock price determination

Stock price determination - capm

Reference no: EM1333120

The stock of Preston Inc. is expected to pay a dividend of $6.00 during the ensuing year and is expected to grow at a constant rate of 8% in the foreseeable future. Investors have recently evaluated future market return variance to be 0.0016 and the covariance of returns for Preston and the market as .00352. Assuming a required rate of return of 14% and a risk free rate of 6%, determine a price for Prestons stock.

Reference no: EM1333120

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Stock price determination - capm : The stock of Preston Inc. is expected to pay a dividend of $6.00 during the ensuing year and is expected to grow at a constant rate of 8% in the foreseeable future. Assuming a required rate of return of 14% and a risk free rate of 6%, determine a p..

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