Problem:
Ebay currently has a beta of one. Additionally, the rate of return in the market has been .12 historically, and the risk premium is .16. You know that Ebay will grow 800% in the next one year and after that it will rise by 7% forever.
Required:
Question: If the firm pays a dividend now of $10, what is the market price?
Note: Please provide reasons to support your answer.