A stock just paid a dividend of D 0 = $0.5. The required rate of return is r s =

ID: 2699943 • Letter: A

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A stock just paid a dividend of D0 = $0.5. The required rate of return is rs = 17.3%, and the constant growth rate is g = 3.5%. What is the current stock price? A stock just paid a dividend of D0 = $0.5. The required rate of return is rs = 17.3%, and the constant growth rate is g = 3.5%. What is the current stock price? A stock just paid a dividend of D0 = $0.5. The required rate of return is rs = 17.3%, and the constant growth rate is g = 3.5%. What is the current stock price? A stock just paid a dividend of D0 = $0.5. The required rate of return is rs = 17.3%, and the constant growth rate is g = 3.5%. What is the current stock price? A stock just paid a dividend of D0 = $0.5. The required rate of return is rs = 17.3%, and the constant growth rate is g = 3.5%. What is the current stock price? A stock just paid a dividend of D0 = $0.5. The required rate of return is rs = 17.3%, and the constant growth rate is g = 3.5%. What is the current stock price? A stock just paid a dividend of D0 = $0.5. The required rate of return is rs = 17.3%, and the constant growth rate is g = 3.5%. What is the current stock price?

Explanation / Answer

P = D/(r-g) = 0.5/(0.173-0.035) = $3.623

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A stock just paid a dividend of D 0 = $0.5. The required rate of return is r s =

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