You are considering an Investment In Justus Corporation's stock, which is expected to pay a dividend of $2.75 a share at the end of the year (D₁ $2.75) and has a beta of 0.9. The risk-free rate is 3.9%, and the market risk premium is 5%. Justus currently sells for $41.00 a share, and its dividend is expected to grow at some constant rate, g. Assuming the market is in equilibrium, what does the market belleve will be the stock price at the end of 3 years? (That is, what is Pa?) Do not round Intermediate calculations. Round your answer to the nearest cent.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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You are considering an investment in Justus Corporation's stock, which is expected to pay a dividend of $2.75 a share at the end of the year (D₁ = $2.75) and has a beta of 0.9. The risk-free rate is 3.9%, and the market risk premium is 5%. Justus
currently sells for $41.00 a share, and its dividend is expected to grow at some constant rate, g. Assuming the market is in equilibrium, what does the market belleve will be the stock price at the end of 3 years? (That is, what is Pa?) Do not round
Intermediate calculations. Round your answer to the nearest cent.
$
Transcribed Image Text:You are considering an investment in Justus Corporation's stock, which is expected to pay a dividend of $2.75 a share at the end of the year (D₁ = $2.75) and has a beta of 0.9. The risk-free rate is 3.9%, and the market risk premium is 5%. Justus currently sells for $41.00 a share, and its dividend is expected to grow at some constant rate, g. Assuming the market is in equilibrium, what does the market belleve will be the stock price at the end of 3 years? (That is, what is Pa?) Do not round Intermediate calculations. Round your answer to the nearest cent. $
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