Compute Current Stock price
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The Zumwalt Company is expected to pay a dividend of $2.25 per share at the end of the year, and that dividend is expected to grow at a constant rate of 5.00% per year in the future. The company's beta is 1.15, the market risk premium is 5.50%, and the risk-free rate is 4.00%. What is the company's current stock price?
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Solution Summary
The solution computes current stock price of a Company using Dividend Discount Model.
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Required Rate of Return = 4% + 1.15 * (5.5% - 4%)
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