Harrison corporation is interested in acquiring van buren, Financial Management

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Harrison corporation is interested in acquiring van buren

Valuation

Harrison Corporation is interested in acquiring Van Buren Corporation. Assume that the risk-free rate of interest is 4% and the market risk premium is 6%.

Van Buren currently expects to pay a year-end dividend of $2.40 a share (D1 = $2.40). Van Buren's dividend is expected to grow at a constant rate of 5% a year, and its beta is 0.8. What is the current price of Van Buren's stock? Round your answer to the nearest cent.

$ _____

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Financial Management: Harrison corporation is interested in acquiring van buren

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