Question
Burnham & Company's $75 par value preferred stock pays an annual dividend of $11. The stock has a beta of 0.85, the current T-bill rate
Burnham & Company's $75 par value preferred stock pays an annual dividend of $11. The stock has a beta of 0.85, the current T-bill rate is 2.4%, and the S&P 500's expected return is 11.3%. Assuming that CAPM holds, what is the intrinsic value of this preferred stock?
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Guardians Of Finance
Authors: James R. Barth, Gerard Caprio, Ross Levine
1st Edition
0262526840, 978-0262526845
