UML CO has a beta of 1.5, risk free rate is 2.5% and the market return is 6%. The current dividend (D0) is $1.50 and expect to grow at 5% per year constant, what is the UML stock price in three years (P3)?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 5P: A company currently pays a dividend of $2 per share (D0 = $2). It is estimated that the company’s...
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UML CO has a beta of 1.5, risk free rate is 2.5% and the market return is 6%.
The current dividend (D0) is $1.50 and expect to grow at 5% per year
constant, what is the UML stock price in three years (P3)?
Transcribed Image Text:UML CO has a beta of 1.5, risk free rate is 2.5% and the market return is 6%. The current dividend (D0) is $1.50 and expect to grow at 5% per year constant, what is the UML stock price in three years (P3)?
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