单选题 Assuming that the risk-free rate is 5 percent, the expected return on the market is 10 percent, and the stock"s beta is 0.5, what is the value of a stock that paid a $ 0. 30 dividend last year, if dividends are expected to grow at a rate of 6 percent forever?

A、 $15.00.
B、 $16.63.
C、 $21.20.

【正确答案】 C

【答案解析】The discount rate is k =0.05+0.5×(0.10-0.05)=0.075. Use the infinite period dividend discount model to value the stock. The stock value =D ₁ /(k-g)=(0.30×1.06)/(0.075-0.06)=$21.20.