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Arisa [49]
3 years ago
7

City Equipment announced this morning that its next annual dividend will be decreased to $1.90 a share and that all future divid

ends will be decreased by an additional 1.9 percent annually. What is the current value per share if the required return is 16.8 percent?
Business
1 answer:
FrozenT [24]3 years ago
4 0

Answer:

$10.16

Explanation:

Calculation for What is the current value per share if the required return is 16.8 percent

Using this formula

Current value per share Decreased in Annual dividend/Decreased in future dividends +Required return

Let plug in the formula

Current value per share =$1.90/1.9 percent+16.8 percent

Current value per share =$1.90/0.187

Current value per share =$10.16

Therefore the current value per share if the required return is 16.8 percent will be $10.16

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