The risk-free rate of return is 4%, the required rate of return on the market is 10%, and high-flyer stock has a beta coefficient of 2.0. if the dividend per share expected during the coming year, d1, is $4.60 and g = 6%, at what price should a share sell? (do not round intermediate calculations. round your answer to 2 decimal places.)

the share should sell at $46

Explanation:

We use the CAPM method to know the required return of the capital

risk free0.04

market rate0.1

beta(non diversifiable risk)2

Ke0.16000 = 16%

Now we calculate with the dividends grow model the intrinsic value of the share:

$4.6/0.1 = $46

christopher columbus sail the ocean blue 1492

the answer would be voluntary exchange -

"the act of buyers and sellers freely and willingly engaging in market transactions. moreover, transactions are made in such a way that both the buyer and the seller are better off after the exchange than before it occurred."

hope this : )

-shy