Shibafox
Mar 25, 2010, 05:37 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.