Question

και μια αμμι το οιομοπυυυυυ CANIS MAXIMUS - CONTACT, Dobermans puppies, Saved Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $2.45 next year. The growth rate in dividends for all three companies is 5 percent. The required return for each company's stock is 8 percent, 11 percent, and 14 percent, respectively. What is the stock price for each company? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) 57:09 Red, Inc. Yellow Corp. Blue Company nces

Answer 1

P_t = D_t × (1 + g) / (R – g)

Red stock price = $2.45 / (.08 − .05) = $81.67

Yellow stock price = $2.45 / (.11 − .05) = $40.83

Blue stock price = $2.45 / (.14 − .05) = $27.22