Answer:
The answer is $41.2
Explanation:
This will be solved by Dividend Discount Model which is one of the ways of valuing the price of shareholders' equity.
Here, the future value of dividend payment are discounted using the cost of equity.
Ke = D1/Po + g
Where Ke is the cost of equity
D1 is future dividend payment.
Po is the current share price or stock price
g is the growth rate.
To find the current price of stock price, we need to re write the equation;
Po = D1 ÷ (Ke - g)
D1 = Do x 1.03
= $2 x 1.03
=2.06
Ke = 8% or 0.08
g = 3% or 0.03
So we have;
2.06 ÷ (0.08 -0.03)
$2.06 ÷ 0.05
$41.2
Answer:
The answer to your question is False.
Answer:
Option C is correct
Explanation:
Because of the steep differential in the price would psychologically push the runners to run faster in order to earn the highest price.