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)?

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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Question

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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