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spin [16.1K]
3 years ago
9

Burkhardt Corp. pays a constant $13.60 dividend on its stock. The company will maintain this dividend for the next 9 years and w

ill then cease paying dividends forever. If the required return on this stock is 12 percent, what is the current share price?
Business
1 answer:
zalisa [80]3 years ago
4 0

Answer:

current share price = $72.464197

Explanation:

given data

dividend = $13.60

time = 9 year

required return = 12 percent

solution

we get here current share price that is express as

current share price = dividend × \frac{1-(1+r)^{-t}}{r}    ..................1

put here value and we get current share price

current share price = $13.60 × \frac{1-(1+0.12)^{-9}}{0.12}  

current share price = $72.464197

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