How to compute the current value per share of lily stock


Lily Co. is expected to pay a dividend of $5.25 on its common stock next year. The company's dividends are expected to grow at a constant rate of -0.8% indefinitely. The risk-free rate of return is 2% and the expected return on the market portfolio is 6%. If the stock of Lily Co. has a beta of 1.4, compute the current value per share of Lily Co. stock.

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Finance Basics: How to compute the current value per share of lily stock
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