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Business, 07.05.2020 13:59 dyanaycooper13

Miltmar Corporation will pay a year-end dividend of $4, and dividends thereafter are expected to grow at the constant rate of 5% per year. The risk-free rate is 3%, and the expected return on the market portfolio is 10%. The stock has a beta of 0.60.

a. Calculate the market capitalization rate.

b. What is the intrinsic value of the stock?

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