Q Search the web.. connect. 00 points ndetrtety Assume mestosequane areturn of 9

Question

Q Search the web.. connect. 00 points ndetrtety Assume mestosequane areturn of 9 percent on ts stock Gtmore, Inc. just paid a dividend of $3.10 per share What is the cuent pnce? (oo not round i Current price on its stock. The dividends are expected to grow a a rae or 425DHcestper ntermediate calculations and roued your answer to 2 decimal places,eg. 32.16 six years and uniteen years? (Do not round intermediate cattulabans and round your answers to 2 decimal places,g.32.16 Sa yeers Thirteen years Hists ReferencesBook&Resources

Explanation / Answer

P0 = D1 / (r - g)

P0 = D0*(1+g) / (r-g)

P0 = $3.10 * (1+0.0425) / (0.09 - 0.0425)

P0 = $3.23175 / 0.0475 = $ 68.03

P6 = P0*(1+g)^6 = 68.03 x (1.0425)6 = $ 87.32867

P15 = P0*(1+g)15 = 68.03 x (1.0425)15 = $ 127.01102

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.