Gandha’s Pharmaceutical Corporation’s beta is 1.5. The current risk-free rate is 5.5 percent and the market risk premium is 9 percent. Gandha currently (time 0) pays a dividend of $2 per share. This dividend is expected to grow at a rate of 20 percent for the next 3 years. The current stock price is $32, and the consensus of security analysts is that this price will increase by 30 percent by the end of year 2. Under these circumstances, would you purchase this stock? What do you believe is a fair market price for the stock? Use Table II to answer the question. Round your answer to the nearest cent.
Fair Market Price: $
The stock -Select-should beshould not beItem 2 bought.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more
Recent Comments