Question
A stock is expected to pay a dividend of $1.25 at the end of the next quarter. The expected dividend growth rate is 3% per
A stock is expected to pay a dividend of $1.25 at the end of the next quarter. The expected dividend growth rate is 3% per quarter and the appropriate rate of return on this stock is 20%, compounded quarterly (r4=20%). How much is the intrinsic value of this stock?
62.50
$7.35
$64.38
$7.57
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
College Accounting A Contemporary Approach
Authors: David Haddock, John Price, Michael Farina
3rd edition
77639731, 978-0077639730
