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A stock price based on the Gordon Growth Model can be estimated as follows: V = D_0*(1+g)/(k-g).Suppose that a REIT currently pays a $2 dividend
A stock price based on the Gordon Growth Model can be estimated as follows: V = D_0*(1+g)/(k-g).Suppose that a REIT currently pays a $2 dividend per share (i.e., D_0), which is expected to grow at a constant long run rate of 3% (i.e., g). If the market required return is 12% (i.e., k). What is the estimated stock price of the REIT, based on the Gordon Growth Model?
Group of answer choices
choice a. $18.82 per share
choice b. $20.78 per share
choice c. $22.89 per share
choice d. $25.12 per share
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