Assume that per capita income is growing at different rates in the following countries: Nepal, 0.7 percent; Kenya, 1.3 percent;
1 answer:
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Answer:
The correct answer is C. $46.50.
Explanation:
The current value of one share of stock is the present value of all expected future cash flows. The present value (PV) of cash flows in each year is calculated as follows.
PV = Future value / (1 + Rate of return)^Number of years
The future value is the dividend received on the share in a particular year while the rate of return is 11.4% (i.e. 0.114).
Applying the above formula,
Current value of share = $1.221 + $0.927 + $0.977 + $0.260 + $43.114
= $46.50
Hence, the correct option is C. $46.50.