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The future earnings, dividends and common stock price of Miami Tech are expected to grow 6% per year and its required return is 10%. Miami
The future earnings, dividends and common stock price of Miami Tech are expected to grow 6% per year and its required return is 10%. Miami Techs common stock currently sells for $25 per share; its last dividend was $2.50; and it will pay a $2.75 dividend at the end of the current year. What is the current intrinsic value based on the DDM model? What is the current dividend yield? Is the stock a buy?
41.66, 6%, yes
25, 10%, no
62.50, 10%, yes
None of the above
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