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Header​ Motor, Inc., paid a ​$ 3.92 3.92 dividend last year. At a constant growth rate...

Header​ Motor, Inc., paid a ​$ 3.92 3.92 dividend last year. At a constant growth rate of 6 6 ​percent, what is the value of the common stock if the investors require a 8 8 percent rate of​ return? The value of the common stock is ​$ nothing . ​(Round to the nearest​ cent.)

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Answer #1
Price = recent dividend* (1 + growth rate )/(cost of equity - growth rate)
Price = 3.92 * (1+0.066) / (0.088 - 0.066)
Price = 189.94
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