Question

In: Finance

Given the following information, what is TODAY’s stock price? Today’s Dividend = $3.18 Expected Growth rate...

Given the following information, what is TODAY’s stock price? Today’s Dividend = $3.18 Expected Growth rate in dividends = 2.89 Discount Rate (Required return) = 6.63 Calculate your answer to the nearest penny (e.g., 2.51)

Solutions

Expert Solution

TODAY’s stock price = D0(1 + g) / (r - g)

TODAY’s stock price = $3.18(1 + 0.0289) / (0.0663 - 0.0289)

TODAY’s stock price = $87.48


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