Risk free rate is 6percentage and the market risk premium

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Assume the risk free rate is 6percentage and the market risk premium is 6 percentages. The stock of physician care network is (PCN) has a beta of 1.5. The last dividend paid by PCN (D0) was $2 per share.

a. What would be PCN’s stock value be if the dividend was expected to grow at a constant; -5%,0%5% 10%

b. what would be the stock value if the growth rate is 10 percentage, but PCN’s beta falls to 1.0,0.5?

Reference no: EM13725105

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