Hampton Corporation's common stock dividends are expected to grow by 8% per year. Recently, the firm paid
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Question:
Hampton Corporation's common stock dividends are expected to grow by 8% per year. Recently, the firm paid a $3.00 common stock dividend. Hampton has a beta of 1.40. The expected return on the S&P 500 index is 12.5% and the rate of return on U.S. Treasury securities is 7%. Using this information and the CAPM, what is the stock's intrinsic value?
a) $72
b) $24
c) $25.92
d) $66.67
e) $48.36
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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