What would the pcn stock value be?

Mathematics
Tutor: None Selected Time limit: 1 Day

Assume the risk-free rate is 6 percent and the market risk premium is 6 percent the stock of Physicians Care Network has a beta of 1.5. The last dividend paid by PCN (Do) was $2 per share.

a). what would pcn stock value be if the dividend was expected to grow as constant

               -5%?

               0%?

               5%?

               10%?

Nov 18th, 2015

Thank you for the opportunity to help you with your question!

First we have to calulate the cost of equity (Ke)

Ke = Risk free rate+Beta*(market risk premium)

=6%+1.5*6%

=15%


Please let me know if you need any clarification. I'm always happy to answer your questions.
Nov 18th, 2015

Did you know? You can earn $20 for every friend you invite to Studypool!
Click here to
Refer a Friend
...
Nov 18th, 2015
...
Nov 18th, 2015
Dec 9th, 2016
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer