The intrinsic value of a zero-growth stock is simply the capitalized value of its annual dividends.

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Quizplus · Accepted Answer

This is because the value of a zero-growth stock comes entirely from its dividends, as there is no expectation of the stock increasing in value over time. Therefore, the intrinsic value can be calculated by taking the annual dividend payment and dividing it by the required rate of return for the investor.

The Intrinsic Value of a Zero-Growth Stock Is Simply the Capitalized