Question 1
Assume that your company's most recent dividend was $2.50 per share (Do = $2.50)
and that the dividend is expected to grow at a constant rate of 8 percent per year.
Also assume that the risk-free rate is 6 percent, the return on the market is 10
percent, and that your company has a beta of 1.40. Given this information, determine
what the price of the stock should be today.
