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Natali [406]
4 years ago
5

Hi-Tek plans to pay a $6 per share dividend one year from today, and will increase the dividend by 4 percent per year forever. W

hat is the current share price if the required return on this stock is 16 percent
Business
1 answer:
Lunna [17]4 years ago
5 0

Answer:

The current share price if the required return on this stock is 16 percent is $50.

Explanation:

price = dividend next year /(required rate of return - growth rate)

         = 6/(16% - 4%)

         = 50

Therefore, The current share price if the required return on this stock is 16 percent is $50.

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