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  3. 3. stock xyz has a beta of 2.0. the risk-free rate

3. Stock XYZ has a beta of 2.0. The risk-free rate is 1%. The market...

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Accounting

3. Stock XYZ has a beta of 2.0. The risk-free rate is 1%. The market is expected to return 10% a year before the pandemic hits. The stock is expected to pay a dividend of $1 a year, every year, forever. The pandemic hits. Investors now expect the market to return only 8% a year. The risk-free rate is lowered to 0%, and now the stock is expected to pay a dividend of $0.50 a year, every year, forever. What is the expected percentage change in the price of the stock?

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