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What does the market believe will be the stock price

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Problem 1: You are considering an investment in Crisp Cookware's common stock. The stock is expected to pay a dividend of $2 a share at the end of this year (D1=$2.00); 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 7.7 at same constant rate g, and the stock currently sells for $25 a share. Assuming the market is in equilibrium, what does the market believe will be the stock's price at the end of 3 years (ie, what is P3)?

Reference no: EM132818278

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