Question


Mannix Corporation stock currently sells for $75 per share. The market requires a return of 8.8 percent on the firms stock.
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Current Price = $75.00
Required Return = 8.80%
Growth Rate = 2.40%

Current Price = Expected Dividend in 1 year / (Required Return - Growth Rate)
$75.00 = Expected Dividend in 1 year / (0.0880 - 0.0240)
$75.00 = Expected Dividend in 1 year / 0.0640
Expected Dividend in 1 year = $4.80

Expected Dividend in 1 year = Recent Dividend * (1 + Growth Rate)
$4.80 = Recent Dividend * 1.0240
Recent Dividend = $4.69

So, the most receipt dividend per share paid on the stock is $4.69

Add a comment
Know the answer?
Add Answer to:
Mannix Corporation stock currently sells for $75 per share. The market requires a return of 8.8...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT