Question

A stock is expected to pay per share every year indefinitely and the equity cost of capital for the company is ​%. What price would an investor be expected to pay per share ten years in the​ future?.

Answer 1

The company's equity cost of capital is 8.4%, and a stock is anticipated to perpetually pay $1.25 a share. In ten years, an investor can anticipate paying $14.88 for each share. correct option is (D)

P = D/R = 1.25/0.084 = $14.88

Since, the dividend paid by the company will always be $1.25, the price of stock the share will always remain the same, even after ten years

A security that denotes ownership of a portion of the issuing company is referred to as a stock, also known as equity. Shares, which are units of stock, entitle its owners to a percentage of the company's assets and income based on how many shares they possess.

The cornerstone of many individual investors' portfolios, stocks are mostly bought and sold on stock exchanges. Government rules aimed at shielding investors from dishonest tactics must be followed when trading stocks.

Learn more about stock here

brainly.com/question/28663581

#SPJ4

The complete question is

a stock is expected to pay $1.25 per share every year indefinitely and the equity cost of capital for the company is 8.4%. What price would an investor be expected to pay per share ten years in the future?

A) $37.20.

B) $29.76.

C) $22.32.

D) $14.88.