Question

In: Finance

Ishiguro Transcontinental paid a dividend of $4.15 last year and the company anticipates this will grow...

Ishiguro Transcontinental paid a dividend of $4.15 last year and the company anticipates this will grow at 3.70% for the foreseeable future. The appropriate discount rate (expect return) for the stock is 12.40%, Ishiguro's stock price is closest to:

A.

$34.71.
B.

$49.47.
C.

$47.70.

Solutions

Expert Solution

Current price=D1/(Required return-Growth rate)

=(4.15*1.037)/(0.124-0.037)

which is equal to

=$49.47(Approx)

jeff jeffy answered 3 years ago
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