Question
Miltmar Corporation will pay a year-end dividend of $5, and dividends thereafter are expected to grow at the constant rate of 2% per year. The
Miltmar Corporation will pay a year-end dividend of $5, and dividends thereafter are expected to grow at the constant rate of 2% per year. The risk-free rate is 3%, and the expected return on the market portfolio is 13%. The stock has a beta of 0.90. What is the intrinsic value of the stock?
A. $35
B. $40
C. $45
D. $50
E. $55
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Financial Management For Public Health And Not For Profit Organizations
Authors: Steven A. Finkler
2nd Edition
0131471988, 978-0131471986
