37) Miltmar Corporation will pay a year-end dividend of $5, and dividends thereafter are expected to grow at the constant rate of 5% per year. The risk-free rate is 6%, and the expected return on the market portfolio is 12%. The stock has a beta of 0.75.

a.	Calculate the market capitalization rate. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Market capitalization rate

%

b.	What is the intrinsic value of the stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Intrinsic value

$

41) The market capitalization rate on the stock of Aberdeen Wholesale Company is 12%. Its expected ROE is 14%, and its expected EPS is $3. If the firm's plowback ratio is 50%, its P/E ratio will be _________.

a. 6.67 b.16.67 c. 20.00 d.10.00

44) The market capitalization rate for Admiral Motors Company is 7%. Its expected ROE is 10% and its expected EPS is $5. If the firms plowback ratio is 60%.

a.	Calculate the growth rate. (Input your answer as a nearest whole percent.)

Growth rate

%

b.	what will be its P/E ratio? (Do not round intermediate calculations.)

P/E ratio

49) Next year's earnings are estimated to be $3. The company plans to reinvest 20% of its earnings at 15%. If the cost of equity is 7%, what is the present value of growth opportunities?

a. $18.14 b. $7.07 c. $16.14 d. $17.14

61) Todd Mountain Development Corporation is expected to pay a dividend of $2 in the upcoming year. Dividends are expected to grow at the rate of 9% per year. The risk-free rate of return is 4%, and the expected return on the market portfolio is 19%. The stock of Todd Mountain Development Corporation has a beta of 0.60. Using the constant-growth DDM, the intrinsic value of the stock is _________.

a. 22.22 b. 9.09 c. 50.00 d. 3.60