Assume a major investment service has just given Oasis Electronics its highest investment rating, along with a strong buy recommendation. As a result, you decide to take a look for yourself and to place a value on the company's stock. Here's what you find: This year, Oasis paid its stockholders an annual dividend of $3.66 a share, but because of its high rate of growth in earnings, its dividends are expected to grow at the rate of 12 % a year for the next 4 years and then to level out at 8 % a year. So far, you've learned that the stock has a beta of 1.64 , the risk-free rate of return is 6 %, and the expected return on the market is 11 %. Using the CAPM to find the required rate of return, put a value on this stock.
+5
Answers (2)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Assume a major investment service has just given Oasis Electronics its highest investment rating, along with a strong buy recommendation. ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Home » Business » Assume a major investment service has just given Oasis Electronics its highest investment rating, along with a strong buy recommendation. As a result, you decide to take a look for yourself and to place a value on the company's stock.