Bui Corp. pays a constant $14.60 dividend on its stock. The company will maintai

Question

Bui Corp. pays a constant $14.60 dividend on its stock. The company will maintain this dividend for the next nine years and will then cease paying dividends forever.

If the required return on this stock is 9 percent, what is the current share price? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Bui Corp. pays a constant $14.60 dividend on its stock. The company will maintain this dividend for the next nine years and will then cease paying dividends forever.

Explanation / Answer

Particulars Time PVF Amount PV Cash Inflows (Dividend)         1.00                0.9174                         14.60                         13.39 Cash Inflows (Dividend)         2.00                0.8417                         14.60                         12.29 Cash Inflows (Dividend)         3.00                0.7722                         14.60                         11.27 Cash Inflows (Dividend)         4.00                0.7084                         14.60                         10.34 Cash Inflows (Dividend)         5.00                0.6499                         14.60                           9.49 Cash Inflows (Dividend)         6.00                0.5963                         14.60                           8.71 Cash Inflows (Dividend)         7.00                0.5470                         14.60                           7.99 Cash Inflows (Dividend)         8.00                0.5019                         14.60                           7.33 Cash Inflows (Dividend)         9.00                0.4604                         14.60                           6.72 Share Price                         87.53

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