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Boehm Incorporated is expected to pay a $1.80 per share dividend at the end of this...

Boehm Incorporated is expected to pay a $1.80 per share dividend at the end of this year (i.e., D1 = $1.80). The dividend is expected to grow at a constant rate of 10% a year. The required rate of return on the stock, rs, is 16%. What is the estimated value per share of Boehm's stock? Round your answer to the nearest cent.

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Answer #1

Value per share = D1 / (required rate - growth rate)

Value per share = 1.8 / (0.16 - 0.1)

Value per share = $30.0

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