Corporate managers work for the owners of the corporation. Consequently, they should make decisions that are in the interests o
1 answer:
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Answer:
The value of the stock is $19.50
Explanation:
Hi, let´s check out the formula that we need to use in order to find the price of this stock.
Where:
Do= last dividend (in our case, $1.30)
g = growth rate of the dividend (in our case, 5% or 0.05)
r = required rate of return (in our case, 12% or 0.12)
Everything should look like this:
Therefore, the value of this stock is $19.50
Best of luck.