Question
Find the intrinsic value of the stock that pays a dividend of $1.00 and has a growth rate of 15% for 4 years then it
Find the intrinsic value of the stock that pays a dividend of $1.00 and has a growth rate of 15% for 4 years then it stabilizes at a long-run growth rate of 5%. The stock has a Beta of 1.5, the risk free rate is 2 % and the market return is 12%.
| A. | $10.81 | |
| B. | $12.00 | |
| C. | $15.30 | |
| D. | $15.67 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Multinational financial management
Authors: Alan c. Shapiro
10th edition
9781118801161, 1118572386, 1118801164, 978-1118572382
