Suppose a dividend of $1.25 was just paid today (so DIVo = $1.25). The stock has a required rate of return of 11.2% (rE = 0.112), and investors expect the dividend to grow at a constant rate of 8% (g = 0.08). Given that this is a constant growth stock, determine the current market price today (P0).

Answer rating: 100% (QA)

The current market price P0 of the stock can be calculated usin... View the full answer