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Cigna (CI) - stock value - 20 Apr, 2020

Assume the risk-free rate is 6 percent and the market risk premium is 6 percent. The stock of Cigna (CI) has a beta of 1.5. The last dividend paid by Cigna (D0) was $2 per share.

a. What would Cigna's stock value be if the dividend was expected to grow at a constant –5 percent? 0 percent? 5 percent? 10 percent?

b. What would be the stock value if the growth rate is 10 percent, but Cigna's beta falls to 1.0? 0.5?



Category : Financial Management

Search Keywords :
Cigna , Stock , Value , Dividend , Growth , Rate , Risk , Premium 


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Answer  - 20 Apr, 2020
Please see the excel attachment....


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