Westsyde Tool Company Is Expected to Pay a Dividend of $2.00

question 13

Multiple Choice

Westsyde Tool Company is expected to pay a dividend of $2.00 in the upcoming year.The risk-free rate of return is 6% and the expected return on the market portfolio is 12%.Analysts expect the price of Westsyde Tool Company shares to be $29 a year from now.The beta of Westsyde Tool Company's stock is 1.20.Using a one-period valuation model,the intrinsic value of Westsyde Tool Company stock today is _________.

• A) $24.29
• B) $27.39
• C) $31.13
• D) $34.52

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