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1 year ago

A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is r s

Business

1 answer:

taurus [48]1 year ago

6 0

The stock's current price is $18.29.

<h3>What is Stock Valuation?</h3>

The price of the stock is determined by demand and supply. The price of the stock is also linked with the fundamentals of the company. To determine its intrinsic value the future cash difference is discounted.

Solution-

Stock's current price = Dividend

Required rate of return -Growth rate

Stock's current price = $0.75

10.5 % - 6.4%

Stock's current price = $0.75

4.1%

Stock's current price = $0.75

0.041

Stock's current price = $18.29

Your question is incomplete, but most probably your full question was:

A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is Rs = 10.5%, and the expected constant growth rate is g = 6.4%.

Required: What is the stock's current price?

Learn more about Stock's Current Price on:

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