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drek231 [11]
3 years ago
11

The Jackson-Timberlake Wardrobe Co. just paid a dividend of $2.15 per share on its stock. The dividends are expected to grow at

a constant rate of 4 percent per year indefinitely. Investors require a return of 10.5 percent on the company's stock. a. What is the current stock price
Business
1 answer:
LekaFEV [45]3 years ago
7 0

Answer:

the current stock price is $34.40

Explanation:

The computation of the current stock price is shown below:

Current price is

= D1 ÷ (Required return - Growth rate)

= (2.15 × 1.04) ÷ (0.105 - 0.04)

= $34.4

Hence, the current stock price is $34.40

We simply applied the above formula so that the correct answer could come

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