Question
ABC common stock is expected to earn $4.00 per share (EPS = $4.00) next year and to pay 50% of its EPS in cash dividend.
ABC common stock is expected to earn $4.00 per share (EPS = $4.00) next year and to pay 50% of its EPS in cash dividend. If the expected growth rate in dividends is constant at 6% and the required rate of return for the stock is 11%, the stock price (fair value) today should be
- $25
- $30
- $35
- $40
- $45
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Focus On Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert Hughes, Melissa Hart
6th Edition
125991965X, 978-1259919657
