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  3. 21.) torque corporation just paid a dividend of $1

21.) Torque Corporation just paid a dividend of $1.00. Dividends are expected to grow at...

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Finance

21.) Torque Corporation just paid a dividend of $1.00. Dividends are expected to grow at the rate of 6% per year. The risk-free rate of return is 5%, and the expected return on the market portfolio is 13%. The stock of Torque Corporation has a beta of 1.2. What is the intrinsic value of Torque's stock?

Multiple Choice

A.) $14.29

B.) $14.60

C.) $12.33

D.) $11.62

22.) High Tech Chip Company is expected to have EPS in the coming year of $2.50. The expected ROE is 12.5%. An appropriate required return on the stock is 11%. If the firm has a dividend payout ratio of 70%, the growth rate of dividends should be

Multiple Choice

A.) 3.75%.

B.) 5.25%.

C.) 6.60%.

D.) 7.50%.

E.) 8.75%.

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