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Bergman Corp. has paid an annual dividend of $2.00 per share over the past seven years, including the last payment this month. Investors expect a
Bergman Corp. has paid an annual dividend of $2.00 per share over the past seven years, including the last payment this month. Investors expect a brighter future for Bergman and now expect Bergmans dividend payout to be $2.10 for the end of the year and for the foreseeable future. If the opportunity cost of capital is 12%, what is the intrinsic value of Bergman Corp.s common stock? What happens to the intrinsic price of the stock if the market interest rate falls? Explain.
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