Suzi Owns 100 Shares of AB Stock

question 92

Multiple Choice

Suzi owns 100 shares of AB stock. She expects to receive a $238 in dividends next year. She also expects the stock to sell for $46 a share one year from now. What is the intrinsic value of this stock if the dividend payout ratio is 40% and the discount rate is 13.5%?

• A) $38.19
• B) $42.63
• C) $40.53
• D)$45.77

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