Compute the stock price change

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Company Z stock is trading at $30 per share (its equilibrium price) given that the risk free interest rate is 9% and the equilibrium risk premium on the market portfolio is 8%. The company's long run growth is expected to remain 5% per year forever. Last year's EPS were $3 and the dividend payout ratio is 50%. If beta increases by 50% by how much will the stock price change? (Assume all other factors remain constant).

Reference no: EM1356029

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