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You are considering an investment in the common stock of Cowher Corp. The stock is expected to pay a 1 answer below » You are considering an investment in the common stock of Cowher Corp. The stock is expected to pay a dividend of $2 per share at the end of the year (i.e., D1 = $2.0 ). The stock has a beta equal to 1.2. The risk-free rate is 6 percent. The market risk premium is 5 percent. The stock’s dividend is expected to grow at some constant rage, g. The stock currently sells for $40 a share. Assuming the market is in equilibrium, what does the market believe the stock price will be at the end of three years? (In other words, what is P3?) Sep 18 2015 11:57 AM
