What is the price of a share of common stock that has an expected dividend of $3.00, a tax rate of 30%, a required return of 15%
1 answer:
Answer:
Current price of the share common stock will be $30
So option (c) will be correct answer
Explanation:
We have given expected dividend
Required rate of return = 15 % = 0.15
Tax rate = 30 %
Growth rate = 5 %
Beta = 2
We have to find the price of the share
Price of the share is given by
So current price of the share stock will be equal to $30
So option (C) will be correct answer
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