Determine the value of stock


Question: The Cumins Engine Company common stock has a beta of $.9. The current risk free value of return is 5 percent and the market risk premium is 8 percent. The COE of the company is quoted in a press release as saying that the firm will pay a dividend of $.80 each share in the coming year and expects the dividends to grow at a value of 7 percent for the foreseeable future. Using the fixed growth model, determine the value that would you assign to this stock?

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Finance Basics: Determine the value of stock
Reference No:- TGS018722

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