Suppose you buy a stock that paid an annual dividend this


Suppose you buy a stock that paid an annual dividend this year of $5. The firm has Net Income of $1 million and a Common Book Value of $10 million. Also, the firm retains 70% of its net income. Finally, the risk free rate is equal to 4%, the return of the market is 16%, and the stock's beta is equal to one. How much is this stock worth?

a. $50.00

b. $53.00

c. $33.33

d. $59.44

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Business Management: Suppose you buy a stock that paid an annual dividend this
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