a) Stock A just paid an annual dividend of $1.25 per share. The company expects that annual dividends will grow at a steady rate of 4%. Assuming a discount rate of 10.5%, what is the per share value of Stock A today?

b) Stock B just paid an annual dividend of $1.50 per share. The company does not plan to increase or decrease the dividend; it plans to pay shareholders an annual dividend of $1.50 per share indefinitely. Assuming a discount rate of 6.0%, what is the per share value of Stock B today?

Answer rating: 100% (QA)

a To calculate the per share value of Stock A today using the dividend di... View the full answer