A share of stock just recently released a dividend for $1.72 per share, given an expected dividend growth rate of 4.00%, and a discount rate of 23.50%, what is the price per share of the stock?
a. $9.17 |
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b. $7.32 |
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c. $8.82 |
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d. $-8.82 |
Current price=D1/(Discount rate-Growth rate)
=(1.72*1.04)/(0.235-0.04)
which is equal to
=$9.17(Approx).
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