Comments on: What is the stock’s expected price seven years from today? http://www.urban-strategies.net/stock/what-is-the-stock%e2%80%99s-expected-price-seven-years-from-today Personal Finance & The Stock Market Wed, 05 May 2010 06:52:59 +0000 hourly 1 http://wordpress.org/?v= By: Moon http://www.urban-strategies.net/stock/what-is-the-stock%e2%80%99s-expected-price-seven-years-from-today/comment-page-1#comment-2111 Moon Sat, 13 Mar 2010 00:19:59 +0000 http://www.urban-strategies.net/stock/what-is-the-stock%e2%80%99s-expected-price-seven-years-from-today#comment-2111 Ks=risk free rate+ beta * market premium= 0.05+1.2*0.05=0.11 dividend constrant growth Price or present value P= 40 D1=2 $ per share. P0=D1/(1+g) , g = constant growth g=-0.05(means declining) Price at year 7=Price at year 0*(1+g)power 7 =40*(0.95)pwer 7 = 27.93349 I hope it is correct<br><b>References : </b><br>currently taking Finance 101 Ks=risk free rate+ beta * market premium= 0.05+1.2*0.05=0.11
dividend constrant growth
Price or present value P= 40
D1=2 $ per share.
P0=D1/(1+g) , g = constant growth
g=-0.05(means declining)
Price at year 7=Price at year 0*(1+g)power 7
=40*(0.95)pwer 7
= 27.93349

I hope it is correct
References :
currently taking Finance 101

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