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SCORPION-xisa [38]
3 years ago
8

A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is rs = 10.5%, and the expect

ed constant growth rate is g = 6.4%. What is the stock's current price? $17.39 $17.84 $18.29 $18.75 $19.22
Business
1 answer:
kipiarov [429]3 years ago
5 0

Answer:

<em>$18.29</em>

Explanation:

It is very simple as per the question to calculate the current stock price.

The formula for calculating the Stock price is,

P = D/(r-g)

Hence, we calculate as follows,

Price = 0.75/(0.105-0.064)

Price = 0.75/0.041

<u><em>Price = $18.29</em></u>

<u><em /></u>

<u><em>Good Luck.</em></u>

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