Using the constant growth dividend valuation model, calculate the intrinsic value of a stock that pays a
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Question:
Using the constant growth dividend valuation model, calculate the intrinsic value of a stock that pays a dividend this year of $2.00 and is expected to grow at 6%. The beta for this stock is 1.5, the risk-free rate of return is 3% and the market return is 12%.
A.) $20.19
B.) $28. 75
C.) $35.33
D.) $48.27
Related Book For
Fundamentals of Financial Management
ISBN: 9780273713630
13th Revised edition
Authors: James van Horne, John Wachowicz
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