Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. 1.  investors require a 12 percent per year retu

1.  Investors require a 12 percent per year return on the stock of M Company. Yesterday...

60.1K

Verified Solution

Question

Accounting

  1. 1.  Investors require a 12 percent per year return on the stock of M Company. Yesterday M Company paid a $2 dividend (dividends are paid annually). The dividend is expected to grow 20 percent per year for the next 2 years and at 8 percent per year thereafter. At what price should the stock sell? 


  1. 2. A company has just paid its annual dividend at K3 per share. The dividend is expected to grow at a constant rate of 8% indefinitely. The beta of the stock is 1.25, the risk-free rate is 6% and the market premium is 8%. What is the intrinsic value of the stock?

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