#9) Teal Incorporated has announced an annual dividend of $5.90. The firm has zero growth and...

#9) Teal Incorporated has announced an annual dividend of $5.90. The firm has zero growth and the required rate of return for this type of firm is 10 percent. Assuming that the ex-dividend date is January 20, calculate the expected stock price for Teal on January 19 and January 21. (Round answers to 2 decimal places, e.g. 45.15.)

		Stock Price
January 19		$
January 21		$

Solutions

Expert Solution

_______________________________

Value on Jan 21 = Dividend / Rate of return

= 5.90 / 0.10

= 59

Value of Jan 19 = 59 + 5.90

= 64.90

January 19		$64.90
January 21		$59.00

jeff jeffy answered 2 years ago

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