Question
In: Finance
17. Campbell Soup common stock pays dividends once a year. The company just paid a dividend...
17. Campbell Soup common stock pays dividends once a year. The company just paid a dividend of $1.10 and management expects this dividend to grow at a constant rate of 6.5 percent. If the required rate of return is 10 percent, how much would you pay for this stock?
Group of answer choices
a. $33.47
b. $36.25
c. $38.62
d. $31.43
Solutions
Expert Solution
Stock price = D0(1 + g) / (r - g)
Stock price = $1.10(1 + 0.065) / (0.10 - 0.065)
Stock price = $33.47
jeff jeffy answered 2 years agoRelated Solutions
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