
Financial Management: Theory & Practice
16th Edition
ISBN: 9781337909730
Author: Brigham
Publisher: Cengage
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Financial accounting question

Transcribed Image Text:Human's Inc.'s last dividend was $1.50 and its
earnings and dividends are expected to increase
at a constant growth rate of 4%. Humana's
market beta is 1.8. If the current risk-free rate is
5% and the required rate of return on the market
portfolio is 12%, what is the company's current
expected stock price?
a. $7.50
b. $9.58
c. $11.47
d. $17.89
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