An investor holds the stock of Last-But-Not-Least Financials and expects to receive a dividend of $4.75 per

Question:

An investor holds the stock of Last-But-Not-Least Financials and expects to receive a of $4.75 per share at the end of the year. Stock analysts recently predicted that the bank’s dividends will grow at approximately 3 percent a year indefinitely into the future. If this is true, and if the appropriate risk-adjusted (discount rate) for the bank is 14 percent, what should be the current price per share of Last-But-Not-Least Financials’ stock?

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
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