Business, 27.06.2020 21:01 ligittiger12806

A common stock currently has a beta of 1.7, the risk-free rate is 5 percent annually, and the market return is 12 percent annually. The stock is expected to generate a constant dividend of $5.70 per share. A pending lawsuit has just been dismissed and the beta of the stock drops to 1.2. The new equilibrium price of the stock will be:. a. $40.71
b. $37.86
c. $42.54
d. $51.83

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A common stock currently has a beta of 1.7, the risk-free rate is 5 percent annually, and the market...