Question: is this not correct: Using formula PVIF = 1/(1+r)nCurrent Price = D*(1+r) + D* (1/1+r)2+ D* (1/1+r)3+P* (1/1+r)31233a.D= Dividend in year 1 =0.25 *(1+.17)1b.D= Dividend

is this not correct: Using formula PVIF = 1/(1+r)nCurrent Price = D*(1+r) + D* (1/1+r)2+ D* (1/1+r)3+P* (1/1+r)31233a.D= Dividend in year 1 =0.25 *(1+.17)1b.D= Dividend in year 2 =0.25 *(1+.17)22c.D= Dividend in year 3 =0.25 *(1+.17)33d.P= Price Value of share in year 33i.Let the Current Price be Xii.So P=X*(1.6)=> 1.6X3Now Solving above equation for Xa.X =0.25 + 0.25 + 0.25 + 0.998993Xb.X - 0.998993X = 0.75c.0.00100711X = 0.75d.X = 0.75/0.00100711e.X = $744.71

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

The COVID-19 pandemic is over, and you decide to celebrate by going on a vacation to the United States of America. The following quotes are provided by a Foreign Exchange (FX) dealer at the airport....

Q:

correct the hightlighted following answers are wrong and will be thumbed down 4% 6% 15% 1 2 3 4 6 7 (n) periods 2% 22% 3% 7% 8% 9% 10% 11% 12% 0.98039 0.97561 0.97087 0.96156 0.95238 0.94340 0.93458...

Q:

Bome Design Layout Heterenons Mailing Review View Acrobat Table Design Layout Times New Roma - 10-AK A A E... Find - Aalbox Aalbo AaBbc Aalbo ** A-D- A53 1 Normal No Spa Heading: Heading and Share...

Q:

1. [9 marks] In this question, you will prove that every truth table can be implemented us- ing only the conditional operator and the constant False. Hint: in your justifications, you are free to use...

Q:

I have included all the necessary information please answer all my questions and show them all by number Which of the following statements is true regarding this experiment? Check all that apply, The...

Q:

QUESTION 1 The table below contains the level of carboxyhemoglobin (in %) from two independent randomly selected groups of subjects, a group of non-smokers and a group of smokers. At 5% level of...

Q:

I attempted this question once already so the green is set and correct. I need help with the red answers I got wrong. Using the margin of safety ratio, determine which alternative could sustain the...

Q:

please show work in great details got all problems thank you!Question 1 ( 7 pts . ) : Consider the following code. Assume n 1 . p ? ? B { S } p n 1 y p ? ? B { S } p n 0 p ? ? B { S } p i l A r r 0 ;...

Q:

"I'll never understand this accounting stuff," Blake Dunn yelled, waving the income statement he had just received from his accountant in the morning mail. "Last month, we sold 2,000 stuffed State...

Q:

"I'll never understand this accounting stuff," Blake Dunn yelled, waving the income statement he had just received from his accountant in the morning mail. "Last month, we sold 2,000 stuffed State...

Q:

Suppose a cell is taking water into two vacuoles. Let V 1 denote the volume of the first vacuole and V 2 the volume of the second. In each of the following cases, a. Solve the given differential...

Q:

Responsibility and Accountability of Leadership This discussion forum will focus on the responsibility and accountability of leader has to his/her subordinates or followers. First watch the video:...

Q:

The Daksta Cerporation had a 2 0 2 3 taushe income of $ 3 . 5 0 6 , 0 0 0 from operations after all operating corts but before of inservet income taxes offe firms lax mate is 2 1 pencent * ....

Q:

Can you elucidate the role of molecular chaperones and protein quality control systems in maintaining the integrity and homeostasis of the cytoplasm, particularly under conditions of cellular stress...