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Ronny Co.s stock has a required rate of return of 11.50%, and it sells for $22.00 per share. Ronnys dividend is expected to
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Answer #1

P0 = D1 / (k - g)

22 = D1 / (0.115 - 0.07)

22 * 0.045 = D1

D1 = 0.99

D1 = D0 (1+g)

0.99 = D0 (1 + 0.07)

D0 = 0.925

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