Todd Mountain Development Corporation Is Expected to Pay a Dividend

question 17

Multiple Choice

Todd Mountain Development Corporation is expected to pay a dividend of $3 in the upcoming year. Dividends are expected to grow at the rate of 8% per year. The risk-free rate of return is 5%, and the expected return on the market portfolio is 17%. The stock of Todd Mountain Development Corporation has a beta of 0.75. Using the constant-growth DDM, the intrinsic value of the stock is ________.

• A) $4
• B) $17.65
• C) $37.50
• D) $50

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Definitions:

Epidermis

The outermost layer of skin, providing a waterproof barrier and creating our skin tone.

Permeable

Permeable describes a material or membrane that allows substances (such as liquids or gases) to pass through it.

Nourished

Being provided with the food or other substances necessary for growth, health, and good condition.

Lamellar Bodies

Membrane-bound organelles found in certain cells, such as type II pneumocytes, containing lipids and proteins important for pulmonary surfactant production.