If a stock has a required return of "r", its next dividend is expected to be "DIV1", and its dividends are expected to grow at a
constant rate "g" thereafter, then its current share price "P0" can be determined by __________. P0=DIV1/(r-g) P0=DIV1 x (r-g) P0=P1/r P0=DIV1/r
1 answer:
Answer:
The correct formula is 
Step-by-step explanation:
Here,
Required rate = r,
Growth rate = g,
Estimated dividend for next month = 
Current share price = 
By substituting the values in the above formula,

Hence, the correct formula of current share is,

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