What should be price of stock

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1. A stock with a beta of 1.4 will pay a dividend of $2 next year that is expected to grow at 7%. If the risk-free rate is 2% and the market risk premium is 5.5%, what is the most you would be willing to pay for the stock today? A. $79.26 B. $22.22 C. $74.07 D. $20.76

2. Dunder Mifdlin just paid a dividend of $1.35 that is expected to grow at 6%. If the required return on the stock is 11%, what should the price of the stock be in three years?

3. A stock with a beta of 0.8 just paid a dividend of $1.10 expected to grow at 5%. If the risk-free rate is 2% and the market risk premium is 6%, what should be the price of the stock? A. $550.00 B. $64.17 C. $61.11 D. $577.50.

Reference no: EM131917123

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