A company is expected to have earnings of 305 per share


A company is expected to have earnings of $3.05 per share next year, $4.19 in two years, and $5.22 in three years. The dividend payout ratio is expected to remain at 40% over the next three years. You estimate the risk-free rate to be 3% per year and the expected market risk premium to be 6% per year in two years, you expect the leading PE ratio to be 20 The beta of the stock is 0.7 What would be an appropriate estimate of the stock rice today? (Answer to the nearest penny, l.e. 55.55 but do not use a $ sign).

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Financial Management: A company is expected to have earnings of 305 per share
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