What is the equilibrium price of the stock

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Reference no: EM131319593

1. The Horizon Company just paid a dividend of $.75 per share, and that dividend is expected to grow at a constant rare of 5.50% per year in the future. The company's beta is 1.15, the market risk premium is 8%, and the risk-free rate is 2.00%. What is the company's current stock price?

a. $13.88

b. $14,97

c. $17,39.

d. $23,27.

2. The last dividend just paid by Romanis & Company was $1.00. The company's dividend growth rate is expected to be a constant 25% for the next 3 years, after which dividends are expected to grow at a rate of 12% forever. The stockholders' required rate of return is 14%. What is the equilibrium price of the stock?

a. $78.44

b. $77.44

c. $68.38

d. $72,19

Reference no: EM131319593

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