Question
Miltmar Corporation will pay a year-end dividend of $4, and dividends thereafter are expected to grow at the constant rate of 4% per year. The
Miltmar Corporation will pay a year-end dividend of $4, and dividends thereafter are expected to grow at the constant rate of 4% per year. The risk-free rate is 4%, and the expected return on the market portfolio is 12%. The stock has a beta of .75.
a. Calculate the market capitalization rate.
b. What is the intrinsic value of the stock?
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Money Banking And Financial Markets
Authors: Lloyd B. Thomas
1st International Edition
0070644365, 9780070644366
