Determining the stocks expected price


Problem:

A stock that currently trades for $70 per share is expected to pay a year-end dividend of $4 per share. The dividend is expected to grow at a constant rate over time. The stock has a beta of 1.4, the risk-free rate is 3 percent, and the market risk premium is 6 percent.

Required:

Question: What is the stocks expected price seven years from today?

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Accounting Basics: Determining the stocks expected price
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