A company currently reported dividend of $12. It is expected that will reinvest 50% of its earnings perpetually. The return on equity of the company is 20% and remains unchanged in the future. Suppose the cost of equity of the company is 13%, what is the fair price of the stock based on the dividend discount model?

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A: for statement 1, we will have to find the stock price for the upcoming year. we will use the…

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A: Stock price can be computed as follows: Price=DividendRequired return-Growth rate

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A: We will have to use the dividend discount model here.

Q: TSC, Inc. sells for $26 and pays an annual per share dividend of $1.00, which you expect to grow at…

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Q: the value of a share of​ NoGrowth's stock is closest​ to:

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A: 0

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A: Current stock price = $22.79 Dividend rate = 1.19% Growth rate = 23.33%