Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. 16. you are considering an investment in justu

16. You are considering an investment in Justus Corporation's stock, which...

70.2K

Verified Solution

Question

Finance

16.
image
You are considering an investment in Justus Corporation's stock, which is expected to pay a dividend of $2.25 a share at the end of the year ( 01=$2.25 ) and has a beta of 0.9 . The risk-free rate is 2.7%, and the market risk premium is 5.5%. Justus currently selis for $45.00 a share, and its dividend is expected to grow at some constant rate, g. Assuming the market is in equilibrium, what does the market believe will be the stock price at the end of 3 years? (That is, what is P^3 ?) Do not round intermediate calculations. Round your answer to the nearest cent. 5

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Chemistry
1.2K views

The melting point of a solid compound is reported as a range of two temperatures. For...

Physics
1.2K views

The equation of a transverse wave on a string is y=(5mm)Sin[(10m-1)x+(200s-1)t]. The tension in the string...

General Management
1.2K views

5 transformational policies for prosperous and sustainable world. 1. How could we use international marketing strategies to bring...

Accounting
1.2K views

The Corporations Act 2001 (Cth) provides defences for director’s conduct that may otherwise breach sections of...

Calculus
1.2K views

Consider the function f x 4x 6x 3 0 1 7 The absolute maximum of...

Algebra
1.2K views

Which binomial is a factor of the following expression 2x 2 x 1

Accounting
1.2K views

The following transactions were selected from the records of Evergreen Company Duly 12 Sold merchandise...

Accounting
1.2K views

Vail is one of the largest ski resorts in the United States. Suppose that on...

Accounting
1.2K views

Outflung Computers has $1000 in revenue this year, along with COGS of $400 and SG&A...

Accounting
1.2K views

Equivalent Units of Production The following information concerns production in the Baking Department for December....

Accounting
1.2K views

if budgeted revenues are $450,000, breakeven revenues are $200,000, and fixed costs are $100,000, the...

Accounting
1.2K views

Withholding Methods (LO 9.1) Beckett Rice submitted a new Form W-4 for 2022 as presented...