Question
The following details about Stock YZX are known. The equity cost of capital is 7%, the EPS next year will be $2.00 per share, the
The following details about Stock YZX are known. The equity cost of capital is 7%, the EPS next year will be $2.00 per share, the dividend payout rate will be 80%, and the return on new investment will be 8%. Under the DDM model, what should be the fair price for YZX?
Instruction: Type ONLY your numerical answer in the unit of dollars, NO $ sign, NO comma, and round to one decimal places. E.g., if your answer is $7,001.56, should type ONLY the number 7001.6, NEITHER 7,001.6, $7001.6, $7,001.6, NOR 7002. Otherwise, Blackboard will treat it as a wrong answer.
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