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Calculate the current price Po for the common stock of Polychrome Corporation using the Dividend Discount Model (DDM). Assume the firm paid an annual dividend
Calculate the current price Po for the common stock of Polychrome Corporation using the Dividend Discount Model (DDM). Assume the firm paid an annual dividend last year of Do = $1.80. Investors in this stock require a rate of return of R; = 10%, and the constant growth rate of the annual dividend is g = 5.0%. What is the current theoretical price or Po? $54.31 $49.70 $37.80 $16.80 $26.11 Calculate Po for the common stock of Ajax Corporation according to the Dividend Discount Model (DDM). The firm has maintained an annual dividend of $2 per share for many years and is expected to be paid in future years, i.e., a dividend growth rate of g = zero. If investors require a return of 11% on similar investments, determine the intrinsic value of the company's stock right now or Po. $19.19 $22.22 $18.18 $30.00 O $15.00
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