Calculate the market capitalization rate

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Reference no: EM13880858

Miltmar Corporation will pay a year-end dividend of $4, and dividends thereafter are expected to grow at the constant rate of 6% per year. The risk-free rate is 5%, and the expected return on the market portfolio is 10%. The stock has a beta of 0.66.

A) Calculate the market capitalization rate. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

B) What is the intrinsic value of the stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Reference no: EM13880858

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