Consider stock that currently pays an annual dividend

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Consider a stock that currently pays an annual dividend of $1.75 per share. Suppose that by using the present value approach, you expect that the dividends are growing at a rate of 8% per year and you expect they will continue to do so. In addition, the beta of the stock is 2.0, the 3 month T-bill rate now is 1%, the market premium is 5.5%. What is the estimated value of the stock.

Reference no: EM131556359

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