What do investors expect the stock to sell for one year

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Reference no: EM131984524

A share of stock sells for $50 today. It will pay a dividend of $1 per share in exactly 12 months (1 year). Its beta is 1.4; the risk-free rate is 4%; the expected return for the market is 8%.

What do investors expect the stock to sell for one year and one day from now?

(i.e., what will the price be the day after it pays the dividend--assuming the ex-dividend date is the same day the dividend is paid.)

Reference no: EM131984524

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