Old Quartz Gold Mining Company Is Expected to Pay a Dividend

question 59

Multiple Choice

Old Quartz Gold Mining Company is expected to pay a dividend of $8 in the coming year. Dividends are expected to decline at the rate of 2% per year. The risk-free rate of return is 6%, and the expected return on the market portfolio is 14%. The stock of Old Quartz Gold Mining Company has a beta of 0.25. The intrinsic value of the stock is

• A) $80.00.
• B) $133.33.
• C) $200.00.
• D) $400.00.

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Definitions:

Anxiety

A state of fear or apprehension about what's to come.

Secondary Gains

Unintended benefits received from being in a sick or injured state, such as attention, sympathy, or avoidance of responsibility.

Mute

Unable or unwilling to speak, often due to psychological or physiological conditions.

Kindness

The quality of being friendly, generous, and considerate towards others without expecting anything in return.