Question
1) Merck & Co., Inc. provides healthcare solutions worldwide. It operates through four segments: Pharmaceutical, Animal Health, Healthcare Services, and Alliances. The company paid an
1) Merck & Co., Inc. provides healthcare solutions worldwide. It operates through four segments: Pharmaceutical, Animal Health, Healthcare Services, and Alliances. The company paid an annual dividend of $2.44 last year which is expected to increase by 6.9% for 3 years and then increase by 4.5% indefinitely. If the required return is 7.33%, what is the current price of the stock?
- Calculate dividends D1 to D4.
- Calculate the stock price P3 when the constant growth period starts.
- Calculate the current stock price.
- The current price of Merck stock is $82.84. Would you invest in Merck? Why or why not?
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Financial Institutions Management A Risk Management Approach
Authors: Anthony Saunders, Marcia Cornett, Otgo Erhemjamts
10th Edition
1260013820, 978-1260013825
