What should be the current price of a stock that is expected to sell at $45 a
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Question:
What should be the current price of a stock that is expected to sell at $45 a year from now, pays a $5 dividend, and has an after-tax return of 20%? The tax rate on dividends is 40% and the tax rate on capital gains is 20%.
Expert Answer:
To calculate the current price of the stock we can use the dividend discount model DDM The DDM is ba... View the full answer
Related Book For 
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
Posted Date:
