7.value:

10.00 points

Pharmecology just paid an annual dividend of $1.55 per share. It's a mature company, but future EPS and dividends are expected to grow with inflation, which is forecasted at 3.75% per year. The nominal cost of capital is 10.50%.

a. What is Pharmecology's current stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Current stock price$

b. What would be Pharmecology's current stock price using forecasted real dividends and a real discount rate? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Current stock price $