Solved: What must be investors expectation of the price of stock, Finance Basics

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What must be investors expectation of the price of stock

Problem:

A share of stock with a beta of .75 now sells for $50. Investors expect the stock to pay a year-end dividend of $2. The T-bill rate is 4 percent, and the market risk premium is 7 percent. If the stock is perceived to be fairly priced today, what must be investors' expectation of the price of the stock at the end of the year?

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Finance Basics: What must be investors expectation of the price of stock

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Finance Basics: What must be investors expectation of the price of stock

Reference No:- TGS02037865

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