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just olya [345]
3 years ago
15

BenchMark, Inc., just paid a dividend of $3.45 on its stock. The growth rate in dividends is expected to be a constant 5 percent

per year indefinitely. Investors require a return of 13 percent on the stock for the first three years, a return of 11 percent for the next three years, and then a return of 9 percent thereafter. What is the current share price for the stock
Business
1 answer:
Ludmilka [50]3 years ago
8 0

Answer:

BenchMark, Inc.

The current share price for the stock is:

$43.13

Explanation:

Dividend per share = $3.45

Growth rate = 5%

Investors' required rate of return = 13%

Stock value = Dividend per share / (Required Rate of Return – Dividend Growth Rate)

= $3.45/(0.13 - 0.05)

= $43.13

b) To determine BenchMark, Inc.'s current share price divide the dividend per share by the required rate of return after subtracting the growth rate from the required rate of return.

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hello your question has a missing journal entry table attached below is the entry journal table completely filled

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attached below is the journal entry on 31st December 2013

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