Sure Tool Company is expected to pay a dividend of $2 in the upcoming year. The risk-free rate of return is 4%, and the expected return on the market portfolio is 14%. The beta of Sure Tool Company's stock is 1.25. If Sure's intrinsic value is $21.00 today, what must be its growth rate?
A) 0.0%
B) 10%
C) 4%
D) 6%
E) 7%
Correct Answer:
Verified
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