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vampirchik [111]
3 years ago
10

Find the value of a stock that is expected to pay a dividend next year of 2.20 assuming you are required return is 12 percent.

Business
1 answer:
ElenaW [278]3 years ago
7 0

Answer:

$18.33

Explanation:

Given that

Expected dividend pay in next year = $2.20

Required rate of  return = 12%

The formula and the computation of the value of a stock are shown below:

Value of a stock = Expected dividend pay in next year ÷  required rate of  return

= $2.20 ÷ 12%

= $18.33

Simply dividing the Expected dividend pay in next year by the required rate of return to get the value of a stock.

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