Score: 0.5 of 1 pt 15 of 20 (19 complete) HW Score: 85.71%, 24 of...
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Score: 0.5 of 1 pt 15 of 20 (19 complete) HW Score: 85.71%, 24 of 28 pts %x P8.13 (similar to) Question Help Let's assume that you're thinking about buying stock in West Coast Electronics. So far in your analysis, you've uncovered the following information: The stock pays annual dividends of $5.44 a share indefinitely. It trades at a P/E of 10.7 times earnings and has a beta of 1.15. In addition, you plan on using a risk-free rate of 4.00% in the CAPM, along with a market return of 11%. You would like to hold the stock for 3 years, at the end of which time you think EPS will be $7.73 a share. Given that the stock currently trades at $63.40, use the IRR approach to find this security's expected return. Now use the dividend valuation model (with constant dividends) to put a price on this stock. Does this look like a good investment to you? Explain. This security's expected return (IRR) is_%. (Round to two decimal places.) ? Enter your answer in the answer box and then click Check Answer. Clear All Check Answer 3 parts remaining ENG 7:32 AM
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