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Calculate the market capitalization rate

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Question - Miltmar Corporation will pay a year-end dividend of $3, and dividends thereafter are expected to grow at the constant rate of 5% per year. The risk-free rate is 5%, and the expected return on the market portfolio is 10%. The stock has a beta of 0.85.

a. Calculate the market capitalization rate.

b. What is the intrinsic value of the stock?

Reference no: EM133058146

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