Problem:
The douglas company is expected to pay a dividend of 1.25 per share at the end of the year and that dividend is expected to grow at a constant rate of 6.00% per year in the futire. The companys beta is 1.5, the market risk premium is 5.50% and the risk free rate is 4.00%.
Required:
Question: What is the companys current stock.
Note: Be sure to show how you arrived at your answer.