Miltmar Corporation will pay a year-end dividend of $4, and dividends thereafter are expected to grow at the constant rate of 5% per year. The risk-free rate is 3%, and the expected return on the market portfolio is 10%. The stock has a beta of 0.60.
a. Calculate the market capitalization rate. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Market capitalization rate %
b. What is the intrinsic value of the stock? Do not round intermediate calculations. Round your answer to 2 decimal places. intrinsic value $