Question
Here are the data on two stocks with a discount rate of 12%: Stock A Stok B Return on Equity 12 % 10 % Earnings
Here are the data on two stocks with a discount rate of 12%:
| Stock A | Stok B | |||||
| Return on Equity | 12 | % | 10 | % | ||
| Earnings per share | $ | 2.60 | $ | 2.10 | ||
| dividend per share | $ | 1.30 | $ | 1.30 | ||
What is the appropriate stock price for each firm? (Do not round up intermediate calculations. Round your answers to 2 decimal places.)
Step by Step Solution
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Step: 1
We can use the dividend discount model DDM to calculate the appropriate ...
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Corporate Financial Management
Authors: Glen Arnold
5th edition
978-1292178066, 129217806X, 273758837, 978-0273758839
