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Seaside Toys Currently Earns $2

Question 36

Multiple Choice

Seaside Toys currently earns $2.00 per share and currently pays $1.00 per share in dividends. It is expected to have a constant growth rate of 5 percent per year. The required rate of return is 15 percent. What is the intrinsic value of this stock?


A) $6.67
B) $7.00
C) $10.00
D) $10.50

Correct Answer:

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