Sure Tool Company Is Expected to Pay a Dividend of $2

question 45

Multiple Choice

Sure Tool Company 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%. The beta of Sure Tool Company's stock is 1.25. If Sure's intrinsic value is $21.00 today, what must be its growth rate?

• A) 0.0%
• B) 10%
• C) 4%
• D) 6%
• E) 7%

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Definitions:

Ledger

A comprehensive collection of a company's accounts, where all transactions are recorded.