An issue of common stock's most recent dividend is $3.45. Its growth rate is 4.0%. What...
An issue of common stock's most recent dividend is $3.45. Its growth rate is 4.0%. What is its price if the market's rate of return is 8.6%?
Homework Answers
Current price=D1/(Required return-Growth rate)
=(3.45*1.04)/(0.086-0.04)
which is equal to
=$78
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