Asonia Co. will pay a dividend of $5.40, $9.50, $12.35, and $14.10 per share for each of the next four years, respectively. The company will then close its doors. If investors require a return of 10.2 percent on the company's stock, what is the stock price?
$31.51
$35.88
$33.31
$43.57
$37.71
stock price=Future dividend and value*Present value of discounting factor(rate%,time period)
=5.40/1.102+9.50/1.102^2+12.35/1.102^3+14.10/1.102^4
which is equal to
=$31.51(Approx).
Asonia Co. will pay a dividend of $5.40, $9.50, $12.35, and $14.10 per share for each...
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