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The Lashgari Company is expected to pay a dividend of $1 per share at the end of the year, and
that dividend is expected to grow at a constant rate of 5% per year in the future. The company's beta is
1.2, the market risk premium is 5%, and the risk-free rate is 3%. What is the company's current stock
price?
a. $15.00
b. $20.00
c. $25.00 *
d. $30.00
D1 $1.00
b 1.20
rRF 3.0%
RPM 5.0%
g 5.0%
rs 9.0%
P0 $25.00