Business writing must be clear and specific instead of vague, pretentious, or
1 answer:
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Answer:
Current stock price will be $14.50
So option (a) will be correct answer
Explanation:
We have given dividend paid
Growth rate g = 6.5 %
Required return on market = 10.50 %
Risk free return = 4.50 %
So next dividend
We have to find thcompany current stock price
Required rate of return is given by
Required rate of return = Risk Free Return +
= 4.5+1.25×(10.5-4.5) = 12 %
Now current stock price
So option (a) will be correct option