Question
ABC Corp has just paid its annual dividend of $1.50 per share, and it is expected that these dividend payments will continue indefinitely. The dividends
ABC Corp has just paid its annual dividend of $1.50 per share, and it is expected that these dividend payments will continue indefinitely. The dividends are not expected to grow (i.e., g=0). If ABC’s equity cost of capital is 12%, then the value of a share of ABC’s stock is closest to:
$14.50
$12.50
$16.50
$18.50
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Fundamentals of Corporate Finance
Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim
6th Canadian edition
1259024962, 978-1259024962
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