5-a) A stock is expected to pay a dividend of $0.75 at the end of...
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Finance
5-a) A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is rs = 10.5%, and the expected constant growth rate is g = 1.5%. What is the stock's current price?
5-b) 5-year Treasury bonds yield 3.5%. The inflation premium (IP) is 1.9%, and the maturity risk premium (MRP) on 5-year bonds is 0.4%. What is the real risk-free rate, r*?
5-c) A stock just paid a dividend of D0 = $1.50. The required rate of return is rs = 11.0%, and the constant growth rate is g = 4.0%. What is the current stock price?
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