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Roman55 [17]
3 years ago
7

Stoneheart Group is expected to pay a dividend of $3.25 next year. The company's dividend growth rate is expected to be 3.5 perc

ent indefinitely and investors require a return of 12.1 percent on the company's stock. What is the stock price
Business
1 answer:
Vera_Pavlovna [14]3 years ago
5 0

Answer:

$37.79

Explanation:

The computation of the stock price is shown below:

Data given in the question

Next year dividend = $3.25

Growth rate = 3.5%

Required rate of return = 12.1%

So, the stock price is

= Next year dividend ÷ (Required rate of return - growth rate)

= $3.25 ÷ (12.1% - 3.5%)

= $3.25 ÷ 8.6%

= $37.79

We simply apply the above formula to find out the stock price

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3 years ago
A monopolist faces a demand curve given by: P = 105 – 3Q, where P is the price of the good and Q is the quantity demanded. The m
geniusboy [140]

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6 0
4 years ago
A local family-run Greek restaurant has been a part of the community for twenty years. Their mission is to provide local, fresh,
Furkat [3]

The correct answer to this open question is the following.

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