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KIC000100 - gm Using the CAPM Fantasia Corp has a beta of...

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Unformatted text preview: gm -' Using the CAPM Fantasia Corp. has a beta of 1.7. The prevailing risk-free rate is 5% and the market risk premium is 5%. What is the required rate of return of Fantasia Corp. according to the CAPM’? R, =Rf+sJ(R_ 42,) Quick quiz I Y technology‘s stock is expected to pay a dividend of $2 per share at the end of the year. The stock currently has a price of $40 per share, and the stock's dividend is expected to grow at a constant rate of 9 percent. a year. The stock has a beta of 1.2. The market risk premium is 7% and the risk free rate is 5%. What would be the expected stock price 5 years from today? -M Non Constant growth I Meter homes is in a stage of abnormally high growth due to a surge in the demand for homes. The company expects the dividends to grow at a rate of 20% for the next four years, after which there will be no growth in earnings and dividends. The last paid dividend was $1.50. The beta is 15, the return on the market is currently 12.75% and the risk free rate is 4%. What should be the price of the stock? ...
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