Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Neptune Corporation recently paid its annual dividend of $3.03. Dividends have consistently grown at a rate of 6%. The stock has a beta of 0.88.
Neptune Corporation recently paid its annual dividend of $3.03. Dividends have consistently grown at a rate of 6%. The stock has a beta of 0.88. The current risk-free rate is 4.50% and the market return is 10.9%. Assuming that CAPM holds, what is the intrinsic value of this stock? DO NOT ENTER THE $ SIGN. ALSO, ENTER YOUR ANSWER AS A POSITIVE NUMBER. SET YOUR CALCULATOR TO 4 DECIMAL PLACES AND ROUND TO TWO DECIMAL PLACES AT THE END, i.e. IF YOUR ANSWER IS 33.4667 ENTER IT AS 33.47 ONLY
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