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Maui Airlines is experiencing very fast growth but is under-financed.Nevertheless, it is expecting to pay a dividend of $6 in the upcoming year. Thereafter, dividends
Maui Airlines is experiencing very fast growth but is under-financed.Nevertheless, it is expecting to pay a dividend of $6 in the upcoming year. Thereafter, dividends are expected to decline at the rate of 3% per year. The risk-free rate of return is 5% and the expected return on the market portfolio is 13%. The stock of Maui Airlineshas a beta of 0.50. Using the constant growth DDM, the intrinsic value of the stock is _________.
- $50
- B.$100
- C.$150
- D.$200
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