WG Inc. just paid a dividend of $7.90 per share. The dividend is expected to grow at a constant rate forever. The company has a dividend policy of paying out 45% of its earnings every year. The ROE (return on equity) of reinvestments is 13.90%. The required rate of return is 10.90%. What is the current stock price?

Question 6Answer

a.

$313.51

b.

$202.25

c.

$242.70

d.

$261.26

e.

$134.84