Williams Inc. PAID a $3.9 dividend YESTERDAY and that dividend is expected to grow at 3.8% every year thereafter. If the discount rate is 8.8%, what would be the present value of the expected dividend stream (aka the expected price of the firm's stock)? Answer to 2 decimal places.
Price of the stock today=D1/(r-g) | ||||
where: | ||||
D1=next years expected dividend payment | ||||
r=interest rate | ||||
g=dividend growth rate | ||||
= ($3.9*1.038)/0.088-0.038 | ||||
=$4.0482/0.05 | ||||
=$80.96 |
Williams Inc. PAID a $3.9 dividend YESTERDAY and that dividend is expected to grow at 3.8%...
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