What is the current share price of White Mountain Consulting stock if it is expected to pay a dividend of 10.98 dollars every quarter forever, the stock’s expected return is 16.64 percent per year, and the next dividend is expected in 3 months
| As per dividend discount model, current share price is the present value of future dividends which is calculated as follows: | ||||
| Present value of dividends | = | Future Dividends | / | Discount rate |
| = | $ 10.98 | / | 0.0416 | |
| = | $ 263.94 | |||
| So, current share price is $ 263.94 | ||||
| Working: | ||||
| Discount rate | = | 16.64% | * | 3/12 |
| = | 0.0416 |
What is the current share price of White Mountain Consulting stock if it is expected to...
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