Question

Duke Energy (DUK) has just paid an annual dividend of $3.63 per share. If the expected...

Duke Energy (DUK) has just paid an annual dividend of $3.63 per share. If the expected constant growth rate for Duke Energy is 5.1 % and your required rated of return is 12 %, how much are you willing to pay for this stock?

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Answer #1

Current price=D1/(Required return-Growth rate)

=(3.63*1.051)/(0.12-0.051)

which is equal to

=$55.29(Approx).

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