Using the stock valuation formula calculate the value of a share of stock if it is expected
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Question:
Using the stock valuation formula calculate the value of a share of stock if it is expected to pay $5 in dividends, in addition the dividends are expected to grow at a rate of 4 percent forever, and the investor's required rate of return is 12 percent.
A. | $68.50 |
B. | $18.75 |
C. | $39.75 |
D. | $62.50 |
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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