One unit requires 2 direct labor hours to produce. Standard variable overhead per unit is $1.25 and standard fixed overhead per
1 answer:
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Answer:
$16.67
Explanation:
Data provided in the question;
Dividend to be paid next year, D1 = $2
Expected growth rate of dividend, g = 4% = 0.04
Required rate of return on the investment = 16% = 0.16
Now,
Price to be paid for the stock =
or
Price to be paid for the stock =
or
Price to be paid for the stock = $16.67