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sveticcg [70]
3 years ago
9

CSU Co. just paid a dividend of $1.4 per share on its stock. The dividends are expected to grow at a constant rate of 4 percent

per year indefinitely. If investors require an 12.6 percent return on Sky High Co. stock, the current price is $ _________ . Round it to two decimal places, and do not include the $ sign, e.g., 23.56.
Business
1 answer:
boyakko [2]3 years ago
8 0

Answer:

$16.93

Explanation:

Current stock price = dividend ( 1 + growth rate) / required return - growth rate

$1.4(1.04) / 0.126 - 0.04 = $16.93

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