What do you believe is a fair market price for the stock

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1. Access the Thomson consensus earnings forecast report for Mylan Laboratories using data available at www.yahoo.com. From the Yahoo main screen, select "Finance." On the next screen enter the ticker symbol for Mylan (MYL). On the next screen, choose "Analyst Estimates."

2. Gandha's Pharmaceutical Corporation's beta is 1.5. The current risk-free rate is 4.5 percent and the market risk premium is 9 percent. Gandha currently (time 0) pays a dividend of $2 per share. This dividend is expected to grow at a rate of 20 percent for the next 3 years. The current stock price is $30, and the consensus of security analysts is that this price will increase by 50 percent by the end of year 2. Under these circumstances, would you purchase this stock? What do you believe is a fair market price for the stock?

Reference no: EM13927433

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