Low Fly Airline Is Expected to Pay a Dividend of $7

question 13

Multiple Choice

Low Fly Airline is expected to pay a dividend of $7 in the coming year. Dividends are expected to grow at the rate of 15% per year. The risk-free rate of return is 6%, and the expected return on the market portfolio is 14%. The stock of Low Fly Airline has a beta of 3.00. The intrinsic value of the stock is

• A) $46.67.
• B) $50.00.
• C) $56.00.
• D) $62.50.

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Definitions:

Fovea

A small depression in the retina where visual acuity is highest, due to a high concentration of cones.

Visual Acuity

The clarity or sharpness of vision, often measured as the ability to discern letters or numbers at a standardized distance.

Peripheral Vision

The ability to see objects and movement outside of the direct line of vision.

Visual Agnosia

A disorder characterized by the inability to recognize and identify objects or faces, despite having functional eyesight.