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Question
You are considering an investment in the common stock of Cowher Corp. The stock is expected to pay a dividend of $2 per share at the end of the year (i.e., 
= $2.00). The stock has a beta equal to 1.2. The risk-free rate is 6 percent. The market risk premium is 5 percent. The stock's dividend is expected to grow at some constant rate, g. The stock currently sells for $40 a share. Assuming the market is in equilibrium, what does the market believe the stock price will be at the end of three years? (In other words, what is ?)
a. $40.00
b. $42.35
c. $45.67
d. $46.31
e. $49.00
Answer
This answer is hidden. It contains 138 characters.
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