Problem:
Crisp Cookware's common stock is expected to pay a dividend of $2.5 a share at the end of this year (D1 = $2.50); its beta is 1.20; the risk-free rate is 4.5%; and the market risk premium is 6%. The dividend is expected to grow at some constant rate g, and the stock currently sells for $33 a share.
Required:
Question: Assuming the market is in equilibrium, what does the market believe will be the stock's price at the end of 3 years (i.e., what is)?
Note: Please provide through step by step calculations.