The market risk premium is 7 percent and the risk free rate


Dukes Power and Gas is currently paying dividend of $1.80. This dividend is expected to grow at a rate of 6 percent in the future. Dukes Power is 10 percent less risky than the market as a whole. The market risk premium is 7 percent, and the risk free rate is 5 percent. What is the estimated price of this stock?

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Financial Management: The market risk premium is 7 percent and the risk free rate
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