Question

Asked Sep 22, 2019

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A stock is expected to pay a dividend of $1.99 at the end of the year. The required rate of return is r_{s} = 13.82%, and the expected constant growth rate is g = 8.0%. What is the stock's current price?

Round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72.

Round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72.

A. $39.61

B. $29.71

C. $34.14

D. $42.68

E. $35.51

Step 1

As per the dividend discount model , the value of the company stock is the...

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