arutjunjan arutjunjan

15-10-2022
Business

Answered

Suppose that a company has a beta of 1.25, the current dividend is 6 euros per share, the
risk-free rate is 5% and the equity market risk premium is 4%. The stock is currently trading at 94 euros.
Determine the constant dividend growth rate that would be required to justify the market price of 94
euros.

Answer :

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