hard · Principles of Finance

A stock is expected to pay a $2.00 dividend next year, and dividends are projected to grow at a constant rate of 4% indefinitely. if the risk-free rate is 3%, the beta is 1.2, and the equity risk premium is 5%, what is the intrinsic value of the stock?

1. $25.00
2. $50.00
3. $40.00
4. $22.22

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