Question
Price Trailing Dividend Stock Per Share P/E Price/Book Yield S&P 500 $3,300 28 3.7 1.60% ABC $100 50 5.5 0.00% DEF $200 40 2.5 1.00%
Price Trailing Dividend
Stock Per Share P/E Price/Book Yield
S&P 500 $3,300 28 3.7 1.60%
ABC $100 50 5.5 0.00%
DEF $200 40 2.5 1.00%
IJK $100 10 2.0 5.00%
XYZ $100 20 4.0 3.00%
$63 is the fair price of stock XYZ if investors expect dividends to grow at a constant rate of 5% per year (forever) and if investors require a 10% annual return on the stock explain why $63 and show math
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International Financial Reporting A Practical Guide
Authors: Alan Melville
6th edition
1292200743, 1292200766, 9781292200767, 978-1292200743
