Question
A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is r s =
A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is rs= 12.5%, and the expected constant growth rate is g = 8.5%. What is its current price?
a.$18.28
b.$17.82
c.$18.75
d.$19.22
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Principles of Managerial Finance
Authors: Lawrence J. Gitman, Chad J. Zutter, Wajeeh Elali, Amer Al Roubaix
Arab World Edition
1408271583, 978-1408271582
