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22 . Fizzy Drinks has just announced a dividend of $0.80 for this year and $0.835 for next year. Dividends are expected to grow at
22. Fizzy Drinks has just announced a dividend of $0.80 for this year and $0.835 for next year. Dividends are expected to grow at a constant rate indefinitely. What is the current stock price if the required return is 13.1 percent?
A) $8.55
B) $9.35
C) $9.57
D) $10.37
Solution: C ; 0.835/0.131-0.04375 = $ 9.57 Where it 0.04375 comes from ?
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