You are considering an investment in Justus Corporation’s stock

You are considering an investment in Justus Corporation’s stock, which is expected to pay a dividend of $1.75 a share at the end of the year (D1 = $1.75) and has a beta of 0.9. The risk-free rate is 5.0%, and the market risk premium is 5.0%. Justus currently sells for $42.00 a share, and its dividend is expected to grow at some constant rate, g.

Q. Assuming the market is in equilibrium, what does the market believe will be the stock price at the end of 3 years? Round your answer to two decimal places. Do not round your intermediate calculations.

KEY TAKEAWAYS BEFORE ATTEMPTING THIS ASSIGNMENT

Investing in stocks has always been a popular way to save and grow money, and Justus Corporation is no exception. This essay will discuss the required rate of return, risk factors, and dividend growth rate associated with investing in Justus Corporation stock. We will use the given information to analyze the market’s expected stock price at the end of 3 years.

The required rate of return is an important metric for investors to understand when assessing the potential of an investment. J Höhler and AO Lansink (2021) highlighted this in their work on agribusiness. The required rate of return is the minimum rate of return that an investor must receive on their investment in order to make the investment worthwhile. This rate is calculated based on the expected risk and return of an investment. The higher the risk, the higher the expected return must be. For example, Justus Corporation stock is a high risk investment with a high potential return. To properly assess this investment, investors must understand the required rate of return and how it is calculated. To calculate the required rate of return for Justus Corporation stock, investors must consider the expected return of the stock, the cost of the stock, the risk of the stock, and the time horizon of the investment. By understanding the required rate of return, investors can make more informed decisions about their investments and ensure that they are receiving the return they are expecting.

In order to assess the risk factors associated with investing in Justus Corporation stock, one must consider the various components of risk associated with emerging markets. As B Black states in the article “Emerging Markets Review” (2001), “risk is a multifaceted concept” (p. 7). These components include political, economic, and financial risk, among others. Political risk is the risk of an event or policy that may adversely affect the returns on an investment. Economic risk is the risk that a country’s macroeconomic policies will not be able to generate sufficient returns to offset the risks associated with investing in that country’s stocks. Finally, financial risk is the risk that currency fluctuations, market conditions, and other factors will damage the value of an investment. By assessing these risk factors, one can gain insight into the potential risks associated with investing in Justus Corporation stock.

The dividend growth rate of Justus Corporation stock has been the subject of much analysis. In 2012, JN Ouso conducted a study on the topic which was published in erepository.uonbi.ac.ke. The study found that the dividend growth rate of Justus Corporation stock was highly uncertain and difficult to predict. Factors such as a company’s financial health, market conditions, and economic outlook can all have an effect on this rate. Ouso’s research showed that the dividend growth rate of Justus Corporation stock was highly dependent on the overall economic environment. If the economy was strong, the dividend growth rate was likely to be higher than in a weaker economic environment. Ouso also found that the stock’s dividend growth rate could be affected by the company’s ability to generate profits and its ability to invest in new opportunities. Ouso concluded that the dividend growth rate of Justus Corporation stock could not be accurately predicted, but rather should be monitored over time to ensure that the company was meeting its financial goals. This analysis can be used to inform an investor’s decision on whether or not to invest in Justus Corporation stock in the future.

Overall, the expected stock price at the end of three years can be calculated using the Gordon Growth Model. By taking the initial dividend of $1.75, the current stock price of $42.00, the risk-free rate of 5.0%, and the expected growth rate of g, a future stock price can be calculated. This exercise illustrates the importance of understanding market characteristics such as initial price, dividends, risk-free rate, and the market risk premium when evaluating an investment in Justus Corporation stock.

Work Cited

J Höhler., AO Lansink.”Measuring the impact of COVID‐19 on stock prices and profits in the food supply chain.”https://onlinelibrary.wiley.com/doi/abs/10.1002/agr.21678

B Black.”The corporate governance behavior and market value of Russian firms.”https://www.sciencedirect.com/science/article/pii/S1566014101000127

“The effect of leverage on share prices at the Nairobi Securities Exchange.”http://erepository.uonbi.ac.ke/handle/11295/13628

WOULD YOU LIKE A CUSTOM ESSAY JUST FOR YOU?

Get Assignment Help- Confidentially!




Why Choose Ace Writing Center?

***Absolutely NO Plagiarism.

***All writing is original.

***Guaranteed Top Grade.

***24/7 Support

***100% Money Back Guarantee

***Free revision

Try it now!

Get 20% Discount on This Paper

Type of paper needed:

Pages:

Academic level:

We'll send you the first draft for approval by at

Total price:

$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

Ace Writing Center has stood as the world’s leading custom essay writing services providers. Once you enter all the details in the order form under the place order button, the rest is up to us.

Essays

Essay Writing Services

At Ace Writing Center, Nowadays, students normally have extremely busy schedules. You will note that some of them have to take on some evening or weekend jobs in order to get some income that can help them to sustain in college or in the university. This can deny them a chance to write all the essays given. Others usually get bombarded with a lot of work by their lecturers. This can still delay such students from working on all their essays. However, some of them usually try to work on all these essays but end up delivering their work late. This can prevent them from graduating since most lecturers are strict on deadlines. If you want to write a business essay, the wise way is to hire an outstanding essay writing service like us, so that you can get the best results. If you are keen, you will note that many companies usually overcharge their customers. Some of them are there only to make money. And in reality, they really don’t care to build a long term commitment with students. You should not choose such companies. You should take your time and choose a reliable company to work with. Ace Writing Center is the ultimate solution for you. We have been offering our writing service for more than 7 years. This is a clear indication that you will get quality essay writing service. We have a wide range of writers who can work on any business essay that you might have. We believe in doing extensive research so that we can provide quality work to all our clients. .

Admissions

Admission and Business Papers

Have you ever had to write an admission essay for college? The majority of students face the same issues when applying to a university or college and many in such situations decide they need professional help to cope with this matter. They get in a situation when the deadline keeps coming closer but lack motivation to start because they are just not sure if their writing skills are strong enough. We have a solution for you! Ace Writing Center is the best admission essay writing service with a large professional team and years of experience in providing high-quality papers to students of all levels and faculties. The mission of our team is to help students make their dreams of entering a good college come true and that’s what we offer!.

Editing

Editing and Proofreading

Sometimes all the words for your paper just flow out of your mind and into your fingers. You type quickly at your keyboard and there they are, your beautiful words right there on the screen. But you have no idea how to polish it up. You may be wishing there was a paper writing service that offered this type of writing service. Look no more! Here at Ace Writing Center, we offer you an editing and proofreading option that you can't find anywhere else..

Coursework

College Essay Writing

In case you are familiar Ace Writing Center, you know the way to distinguish a better company from a cheap one exactly. First of all, poor service website does not have a sufficient support. We think support team is an essential part of success; it has to answer all clients’ questions and be a connecting link between clients and their writers. On our web-service you will get answers about anything you need and your writer will receive all your instructions, assignments and requirements exactly and swiftly. A writing service that we run has got a flexible pricing system that will save you from senseless wastes and many bonus systems that let you sparing money for something important for you.