Assume Evco, Inc , has a current stock price of $50 and will pay a $2 dividend in one year its equity cost of capital is 15 What price must you expect Evco stock to sell for immediately after the firm pays the dividend in one year to justify its current price ...

Plan We can use Eq 71 to solve for the price of the stock i ...

Assume Evco, Inc., has a current stock price of $50 and will pay a $2 dividend in

Question:

Assume Evco, Inc., has a current stock price of $50 and will pay a $2 in one year; its equity is 15%. What price must you expect Evco stock to sell for immediately after the firm pays the in one year to justify its current price?

Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...