Burkhardt Corp. pays a constant $14.70 dividend on its stock. The company will maintain this dividend for the next ten years and will then cease paying dividends forever.
If the required return on this stock is 11 percent, what is the current share price?
Share price $_______
Share price=Annual dividend*Present value of annuity factor(11%,10)
Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate
=14.7[1-(1.11)^-10]/0.11
=14.7*5.889232011
=$86.57(Approx).
7. Stock Valuation. Burkhardt Corp. pays a constant $13.50 dividend on its stock. The company will maintain this dividend for the next 9 years and will then cease paying dividends forever. If the required return on this stock is 9.2 percent, what is the current share price?
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Burkhardt Corp. pays a constant $13.40 dividend on its stock. The company will maintain this dividend for the next 6 years and will then cease paying dividends forever. If the required return on this stock is 9 percent, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g.. 32.16.) Share price
Burkhardt Corp. pays a constant $13.80 dividend on its stock. The company will maintain this dividend for the next seven years and will then cease paying dividends forever. If the required return on this stock is 9 percent, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Share price $
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