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What is the highest price an investor would pay

Problem: Roulette Enterprises expects to pay a perpetual annual dividend of 65c. The beta of their stock has been calculated ex-post to be 0.8. If the market-risk premium and risk free rate were 8% p.a. and 7% p.a. respectively, what is the highest price an investor would pay for their shares?

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Roulette Enterprises expects to pay a perpetual annual dividend of 65c. The beta of their stock has been calculated ex-post to be 0.8. If the market-risk premium and risk free rate were 8% p.a. and 7% p.a. respectively, what is the highest price a

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Solution Preview :

Prepared by a verified Expert

Accounting Basics: What is the highest price an investor would pay

Reference No:- TGS01739715

Have a Question? (oR Write a Review)

Recent Questions Asked Accounting Basics

Q : Total portfolio expected return and standard deviation

Q : Disbursement float or a collection float

Q : Calculate earnings per share under economic scenarios

Q : Form of business organization suit the situation

Q : What is the highest price an investor would pay

Q : Deduce the expected market return and standard deviation

Q : Workstation purchasing cost

Q : Ethical implications of acme deferral of income taxes

Q : Sales growth for janebury corporation

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Solution Preview :

Prepared by a verified Expert

Accounting Basics: What is the highest price an investor would pay

Reference No:- TGS01739715

Recent Questions Asked Accounting Basics

Q : Total portfolio expected return and standard deviation

Q : Disbursement float or a collection float

Q : Calculate earnings per share under economic scenarios

Q : Form of business organization suit the situation

Q : What is the highest price an investor would pay

Q : Deduce the expected market return and standard deviation

Q : Workstation purchasing cost

Q : Ethical implications of acme deferral of income taxes

Q : Sales growth for janebury corporation

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