Suppose you buy a stock that paid an annual dividend this year of $5. The firm has Net Income of $1 million and a Common Book Value of $10 million. Also, the firm retains 70% of its net income. Finally, the risk free rate is equal to 4%, the return of the market is 16%, and the stock's beta is equal to one. How much is this stock worth?
a. $50.00
b. $53.00
c. $33.33
d. $59.44