What is the required return for stock

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Reference no: EM13951695

Target is expected to pay a dividend in year 1 of $2.11, a dividend in year 2 of $4.96, and a dividend in year 3 of $6.24. After year 3 dividends are expected to grow at the rate of 8% per year. Currently, target has a beta of 1.25, and the market premium is 6%, the risk free rate is 2%. What is the required return for stock? How much should the stock be worth today?

Reference no: EM13951695

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