> Common Stock Valuation problem?

Common Stock Valuation problem?

Posted at: 2014-06-09 
Given: Risk-free rate = 6% market risk premium = 5% beta = 1.5 Do = $1.50/share (dividend just paid) gsn1 = 15% (first 2 years) gsn2 = 8% (next 4 years) gc = 5% (constant, starting at the end of year 6) Problem: a. Determine the maximum price (Po) an informed buyer would pay for this stoc, assuming all the information provided is correct b. Determine the expected dividend yield and the expected capital gains yield for year one