Inputs Present Value Current stock Price $ 62.00 Risk Free 2.5% Beta 1.1 Expected Market Return 7.0% Dividend growth rate 6.0% Required Rate of Return PV Dividend This Year's Dividend This Year $ 0.80 Growth Next Year $ 0.92 15% 2 $ 1.06 15% 3 $ 1.22 15% Future Stock...

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Finance

Inputs Present
Value
Currentstock Price $      62.00
RiskFree 2.5%
Beta 1.1
ExpectedMarket Return 7.0%
Dividendgrowth rate 6.0%
RequiredRate of Return
PV Dividend
This Year's Dividend This Year $        0.80 Growth
Next Year $        0.92 15%
2 $        1.06 15%
3 $        1.22 15%
FutureStock Price 3 6.0%
Intrinsic Value Intrinsic Value

Answer & Explanation Solved by verified expert

3.9 Ratings (798 Votes)

From the give dataRequired return of the stock can be calculated using CAPMmodelKe Rf BetaRmRf 25 11425 745Next See Answer

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Transcribed Image Text

InputsPresentValueCurrentstock Price$ 62.00RiskFree2.5%Beta1.1ExpectedMarket Return7.0%Dividendgrowth rate6.0%RequiredRate of ReturnPVDividendThis Year's DividendThis Year$ 0.80GrowthNext Year$ 0.9215%2$ 1.0615%3$ 1.2215%FutureStock Price36.0%Intrinsic ValueIntrinsic Value

			Inputs	Present
			Inputs	Value
Currentstock Price			$ 62.00
RiskFree			2.5%
Beta			1.1
ExpectedMarket Return			7.0%
Dividendgrowth rate			6.0%
RequiredRate of Return
				PV	Dividend
This Year's Dividend		This Year	$ 0.80		Growth
		Next Year	$ 0.92		15%
		2	$ 1.06		15%
		3	$ 1.22		15%
	FutureStock Price	3			6.0%
Intrinsic Value	Intrinsic Value