The company is expected to pay a dividend of 500 per share, Financial Management

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The company is expected to pay a dividend of 500 per share

The XYZ company is expected to pay a dividend of $5.00 per share at the end of the year, and that dividend is expected to grow at a constant rate of 3.00% per year in the future. The company’s beta is 1.1, the market risk premium is 6.0%, and the nominal risk-free rate is 4.00%.

(1) What is the fundamental price of the stock?

(2) What is the stock's expected return?

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Financial Management: The company is expected to pay a dividend of 500 per share

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Financial Management: The company is expected to pay a dividend of 500 per share

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