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Wallace Industries paid a dividend of $1.50 on its common stock last year, which is expected to grow to $1.65 this year. The required rate
Wallace Industries paid a dividend of $1.50 on its common stock last year, which is expected to grow to $1.65 this year. The required rate of return is 16%, and it sells for $25 in the market. What is 1) the intrinsic value and 2) your expected rate of return if you buy it at the market price?
A. $25.5, 15.5%
B. $27.5, 15.5%
C. $25.5, 16.6%
D. $27.5, 16.6%
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