Regulated monopoly electrical utility

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Kruschev Corp. is a regulated monopoly electrical utility. It has just paid a dividend of $1.50 per common share. Given its monopoly position; dividends are expected to grow at a rate of 3% per year for the foreseeable future, i.e. in perpetuity. The standard deviation of the stock’s return is 0.21 and its correlation with the market portfolio is 0.6. The expected return on the market portfolio is 10.2% and its standard deviation is 0.1. The risk-free interest rate is 3.2%. What should be the current price of Kruschev Corp common stock?

Reference no: EM131508763

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