Problemla diversified inc recently paid its annual dividend, Ask an Expert

Accounting

Problem:

LA Diversified Inc. recently paid its annual dividend ($3.00). Dividends have consistently grown at a rate of 3.80%. The stock has a beta of 0.88. The current risk-free rate is 2.40% and the market risk premium (RM - RF) is 8.50%.

Required:

Assuming that CAPM holds, what is the intrinsic value of this stock?

$50.39
$54.94
$50.28
$51.22
$52.79

Note: Show supporting computations in good form.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91166824

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