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You are considering an investment in Justus Corporations stock which is expected to pay a dividend of 250 a share at the end of the year D1 250 and has a beta of 09 The risk free rate is

You are considering an investment in Justus Corporation's stock, which is expected to pay a dividend of $2.50 a share at the end of the year (D1 = $2.50) and has a beta of 0.9. The risk-free rate is 4.7%, and the market risk premium is 5.5%. Justus currently sells for $36.00 a share, and its dividend is expected to grow at some constant rate, g. Assuming the market is in equilibrium, what does the market believe will be the stock price at the end of 3 years? (That is, what is ?) Round your answer to two decimal places. Do not round your intermediate calculations.

 

Aug 26 2020 View more View Less

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