What price best bank share trade at in efficient market, Microeconomics

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What price best bank share trade at in efficient market

Best Bank enjoys steady earnings growth of 10%, the payout ratio is constant and the bank has a beta coefficient of 2.0. The last dividend payment was 6 cents.

(a) If the risk-free rate is 1% and the overall equity market risk premium is 10%. What price was a Best Bank share trade at in an efficient market?

(b) What happens to the price if the equity market risk rises to 11%?

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Microeconomics: What price best bank share trade at in efficient market

Reference No:- TGS058344

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Recent Questions Asked Microeconomics

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Ask an Expert for Answer!!

Microeconomics: What price best bank share trade at in efficient market

Reference No:- TGS058344

Recent Questions Asked Microeconomics

Q : What is the firm''s income tax liability

Q : Show how to derive the cournot-nash equilibrium to game

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