What is the company current expected stock price

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Problem 1: Human's Inc.'s last dividend (D0) was $1.25, and its earnings and dividends are expected to increase at a constant growth rate of 5%. Humana's market beta is 1.2. If the current risk-free rate is 3% and the required rate of return on the market portfolio is 12%, what is the company's current expected stock price?

Option 1: $7.50

Option 2: $9.58

Option 3: $14.92

Option 4: $17.89

Reference no: EM132911205

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