Confusion Corp Is Expected to Pay a Dividend of $2

question 61

Multiple Choice

Confusion Corp is expected to pay a dividend of $2 in the upcoming year. The risk-free rate of return is 4%, and the expected return on the market portfolio is 14%. Analysts expect the price of Confusion Corp shares to be $22 a year from now. The beta of Confusion Corp's stock is 1.25. What is the intrinsic value of Confusion's stock today?

• A) $20.60
• B) $20.00
• C) $12.12
• D) $22.00

---

Definitions:

DSM-5

The Fifth Edition of the Diagnostic and Statistical Manual of Mental Disorders serves as the definitive guide for healthcare professionals to diagnose mental health conditions.

Bulimia Nervosa

An eating disorder characterized by episodes of binge eating followed by behaviors to prevent weight gain, such as self-induced vomiting.

Lifetime Prevalence

The proportion of a population that at some point in their life (up to the time of assessment) has experienced a particular disorder.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, fifth edition, which is a comprehensive classification of officially recognized psychiatric disorders, published by the American Psychiatric Association.