You have been provided with the following information regarding a common share.
Risk-free rate 2.0%; Market portfolio rate of return 6.50%; Beta for the firm 1.50; Dividend expected next year $2.50; Dividend growth rate (expected to remain constant) 2.0%
Given this information, what price are you willing to pay for a share?
- A. $37.78
- B. $37.04
- C. $25.64
- D. $26.15