Multiple Choice
Todd Mountain Development Corporation is expected to pay a dividend of $3.00 in the upcoming year.Dividends are expected to grow at the rate of 8% per year.The risk-free rate of return is 5% and the expected return on the market portfolio is 17%.The stock of Todd Mountain Development Corporation has a beta of 0.75.Using the constant growth DDM,the intrinsic value of the stock is _________.
A) 4.00
B) 17.65
C) 37.50
D) 50.00
Correct Answer:
Verified
Correct Answer:
Verified
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