You expect Stock Q to start paying annual dividends exactly one year from now. You think...
You expect Stock Q to start paying annual dividends exactly one year from now. You think that the first dividend will be $0.53 and that the dividend will grow 4.4% per year forever after that. Your required rate of return for Stock Q is 8.4%. What is the value of Stock Q today? Round your answer to the nearest penny.
Homework Answers
Current price=D1/(Required return-Growth rate)
=0.53/(0.084-0.044)
which is equal to
=$13.25
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