Constant growth valuation: CAPM
10. Boyd Integrated Systems Inc. just paid a dividend of $1.50 per share, and that dividend is expected to grow at a constant rate of 3% per year in the future. The company’s beta is 1.20, the market risk premium is 5.5%, and the risk-free rate is 2.5%. What is the company’s current stock price?
a. $20.56
b. $22.10
c. $23.75
d. $25.33
e. $27.00
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