Use the value line beta and yahoo beta

Assignment Help Financial Management

Reference no: EM131547053

Beta and Value A firm is expected to pay an annual dividend of $.50 next year. After next year the firm’s dividends will grow at a steady state rate of 4% per year. You are trying to value the stock and Value Line lists a stock beta of .99 while Yahoo is reporting a beta of .88. The stock is currently priced at $12.50. If E(RM) – Rf = 7.2% and the risk free rate is 2.3% the stock is ____________________ if you use the Value Line beta and is ____________________ if you use the Yahoo beta.

a) overpriced by $1.71; overpriced by $3.29

b) overpriced by $3.29; overpriced by $1.71

c) underpriced by $1.25; underpriced by $1.55

d) underpriced by $1.55; underpriced by $1.25

Reference no: EM131547053

Questions Cloud

How organizations group projects into programs : Search the internet to find an example of how organizations group projects into programs. What are the benefits to doing so?

Describe the overall goal of a supply chain : Supply chain management is the integration of activities that procure materials and services, transform them into intermediate goods and final products.

Do you think our theory is an accurate model : Do you think our theory is an accurate model of what you experienced over the course of your lifetime so far? If so, why? If not, why not

Educational tuition reimbursement program : Your company has a policy that employees can participate in an educational tuition reimbursement program, provided that the degree obtained will benefit.

Use the value line beta and yahoo beta : Beta and Value A firm is expected to pay an annual dividend of $.50 next year. use the Value Line beta and Yahoo beta.

Pre-initiating and initiating processes : Identify a project that you worked on in the past (or research one online) and discuss at least four of the key decisions made during the pre-initiating.

What is the average investment in accounts receivable : What is the average investment in accounts receivable as shown on the balance sheet?

Project manager to manage and control the situation : What strategies would you use as a Project Manager to manage and control the situation and effectively meet your deliverables?

Explain why the relationship a function : Describe an everyday situation between variables that is a function. Clearly explain why the relationship a function.

User Account

All Pages