A firm will pay a dividend of $3.47 next year. The dividend is expected to grow at a constant rate of 3.17% forever and the required rate of return is 13.18%. What is the value of the stock?
Current price=D1/(Required return-Growth rate)
=3.47/(0.1318-0.0317)
which is equal to
=$34.67(Approx).
A firm will pay a dividend of $3.47 next year. The dividend is expected to grow...
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