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Summit Systems will pay a dividend of $1.67 this year. If you expect Summit's dividend to...

Summit Systems will pay a dividend of $1.67 this year. If you expect Summit's dividend to grow by 5.7% per year, what is its price per share if the firm's equity cost of capital is 11.6%?

The price per share is $_______. (Round to the nearest cent.)

Solutions

Expert Solution

- Dividend to be paid this year(D0) = $1.67

Growth rate of dividend(g) = 5.7%

Equity cost of Capital(ke) = 11.6%

Calculating the Price per share of Stock:-

P0 = $29.92

So, its price per share is $29.92

jeff jeffy answered 2 years ago
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