Biogen Corporation will pay a quarterly dividend per share of $.0.65 at the end of each...

 

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Biogen Corporation will pay a quarterly dividend per share of $.0.65 at the end of each of the next 8 quarters. Thereafter, the dividend will grow at a quarterly rate of 1.4 percent, forever. The appropriate rate of return on the stock is 14 percent, compounded quarterly. What is the current stock price? (Hint: rate of return is quoted in nominal term, i.e., per year. You need to find quarterly rate of return) Biogen Corporation will pay a quarterly dividend per share of $.0.65 at the end of each of the next 8 quarters. Thereafter, the dividend will grow at a quarterly rate of 1.4 percent, forever. The appropriate rate of return on the stock is 14 percent, compounded quarterly. What is the current stock price? (Hint: rate of return is quoted in nominal term, i.e., per year. You need to find quarterly rate of return)

Answer rating: 100% (QA)

To find the current stock price we can use the dividend discount model DDM which calculates the pres... View the full answer