Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. mature conglomerate corporation (mcc) just paid a

Mature Conglomerate Corporation (MCC) just paid a dividend of $1.35 per share, and that dividend is...

80.2K

Verified Solution

Question

Finance

Mature Conglomerate Corporation (MCC) just paid a dividend of$1.35 per share, and that dividend is expected to grow at aconstant rate of 6.00% per year in the future. The company's betais 1.15, the required return on the market is 12.50%, and therisk-free rate is 4.00%. What is the intrinsic value for MCC’sstock? Enter your answer rounded to two decimal places. Do notenter $ or comma in the answer box. For example, if your answer is$12,300.456 then enter as 12300.46 in the answer box.

Answer & Explanation Solved by verified expert
4.1 Ratings (583 Votes)
Solution aCalculation of Cost of equity The Cost of equity of a firm is calculated using the following formula Cost of equity RF RM RF Where RF Risk free rate of return Beta of the firm RM    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Mature Conglomerate Corporation (MCC) just paid a dividend of$1.35 per share, and that dividend is expected to grow at aconstant rate of 6.00% per year in the future. The company's betais 1.15, the required return on the market is 12.50%, and therisk-free rate is 4.00%. What is the intrinsic value for MCC’sstock? Enter your answer rounded to two decimal places. Do notenter $ or comma in the answer box. For example, if your answer is$12,300.456 then enter as 12300.46 in the answer box.

Other questions asked by students

Civil Engineering
1.2K views

What factors must be considered and what limitations exist for the following loops Slinky: Pond: Horizontal: Vertical:

Physics
1.2K views

Consider a particle with a charge-to-mass ratio of ?/? = 1 moving in a uniform magnetic...

Mechanical Engineering
1.2K views

1. (USE MATLAB) Create a table using fprintf that shows the conversion from US Dollars to...

Biology
1.2K views

The MC1R is a section of DNA that encodes the production of melanin that is...

Physics
1.2K views

An electron and a proton are separated by a large distance and the electron approaches...

Physics
1.2K views

If electrical force between two charges is 200N and we increase 10 charge on one...

Basic Math
1.2K views

The amounts of time per workout an athlete uses a stairclimber are normally distributed, with...

Calculus
1.2K views

Use the price demand equation below to find the revenue function Sketch a graph of...

Accounting
1.2K views

Use the following information for the Exercises 3-7 below. (Algo) [The following information applies to...

Accounting
1.2K views

Under PCAOB standards, The Answer is not A Select one: A. the standard unmodified opinion...

Accounting
1.2K views

Martin Company manufactures a powerful cleaning solvent. The main ingredient in the solvent is a...

Accounting
1.2K views

Franklin Cameras, Incorporated manufactures two models of cameras. Model ZM has a zoom lens; Model...