pes this mean? The portfolio exhibits too much business specific risk. O The por
ID: 2552571 • Letter: P
Question
pes this mean? The portfolio exhibits too much business specific risk. O The portfolio exhibits systematic risk. O The portfolio is undiversified. O The portfolio will return less than the market. QUESTION 4 1 points DWI has just paid an annual dividend of $2 per share, which is expected to grow at 5% indefinitely. If your client's required rate of return to meet her retirement goals is 12%, what is the intrinsic value of the stock using the constant growth dividend discount model? $23.43 $26.00 $28.57 $30.00. Click Save and Submit to save and submit. Click Save All Answers to save all answers Save All Answers Close Window Save and S 41Explanation / Answer
4.
Intrinsic Value = Expected Dividend / ( Required Rate of return - growth rate)
= Current Dividend * (1+ Growth rate ) / ( Required Rate of return - growth rate)
= ($ 2 * 105%) / ( 12% - 5%)
= $ 30.00
Hence the correct answer is $ 30.00
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