View Full Version : Crisp's Cookware: Calculate the expected price of the stock in 3 years.
awesomesky
Feb 2, 2010, 09:31 PM
You are considering an investment in the common stock of Crisp's Cookware. The stock is expected to pay a dividend of $2 a share at the end of the year D1=$2. The stock has a beta equal to.0.9. The risk free rate is 5.6%, and market risk premium is 6%. The stock's dividend is expected to grow at some constant rate g. The stock currently sells for $25 a share. Assuming the market is in equilibrium, what does the maret believe will be the stock price at the end of 3 years.
awesomesky
Feb 2, 2010, 09:33 PM
A company currently pays a dividend of $2 per share, D0 $2. It is estimated that the company's dividend will grow at a rate of 20 percent per year for the next 2 years, then the dividend will grow at a constant rate of 7 percent thereafter. The company's stock has a beta equal to 1.2, the risk-free rate is 7.5 percent, and the market risk premium is 4 percent. What would you estimate is the stock's current price?
Clough
Feb 2, 2010, 11:05 PM
Hi, awesomesky!
Are you looking for direct answers to your questions, or for someone to help you with coming up with the answers yourself, please?
If it's the former, please click on the following link to read the announcement there.
https://www.askmehelpdesk.com/finance...-b-u-font.html (https://www.askmehelpdesk.com/finance-accounting/announcement-font-color-ff0000-u-b-read-first-expectations-homework-help-board-b-u-font.html)
Thanks!