Question
StoreAge Inc. recently paid its annual dividend ($3.00), andreported an ROE of 15%, of which 50% is paid as dividends. Thestock has a beta of
StoreAge Inc. recently paid its annual dividend ($3.00), andreported an ROE of 15%, of which 50% is paid as dividends. Thestock has a beta of 1.28. The current risk-free rate is 2.60% andthe market risk premium (RM - RF) is 7.00%. Assuming that CAPMholds, what is the intrinsic value of this stock?
| $75.43 |
| $85.76 |
| $79.43 |
| $76.57 |
| $75.75 |
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Personal Finance Turning Money into Wealth
Authors: Arthur J. Keown
7th edition
978-0133856507, 013385650X, 133856437, 978-0133856439
