Problem:
The Sunny Days Company just paid a divident of $1 per share, and that dividend is expected to grow at a constant rate of 5% per year in the future. The company's beta is 1.2, the market risk premium is 5%, and the risk-free rate is 3%.
Requirement:
Question: What is the company's current stock price?
- 19.25
- 21.00
- 22.75
- 24.50
- 26.25
Note: Please answer in proper manner and show all computations