Stagnant Iron and Steel currently pays a $12.25 annual cash dividend (D0). It plans to maintain the dividend at this
level for the foreseeable future as no future growth is anticipated. If the required rate of return by common
stockholders (Ke) is 18 percent, what is the price of the common stock?
Solution
Problem 10-27
Instructions
Enter a formula to calculate the estimated value (price) of the stock.
Information
Cash dividend	$12.25
Required rate	18%
Price of stock	FORMULA

Please include Excel formula. Thank you.