# How much is a share of Bama Corporation stock expected to be worth one year from now, if you pay \$80 per share today for this stock, the next dividend will be \$4 per share, and your required rate of return on equity investment is 10%?Topic: One-period model for stock valuation; Equity Markets and Stock ValuationQuestion: How much is a share of Bama Corporation stock expected to be worth one year from now, if you pay \$80 per share today for this stock, the next dividend will be \$4 per share, and your required rate of return on equity investment is 10%? (show and label all calculations)

Question

How much is a share of Bama Corporation stock expected to be worth one year from now, if you pay \$80 per share today for this stock, the next dividend will be \$4 per share, and your required rate of return on equity investment is 10%?

Topic: One-period model for stock valuation; Equity Markets and Stock Valuation

Question: How much is a share of Bama Corporation stock expected to be worth one year from now, if you pay \$80 per share today for this stock, the next dividend will be \$4 per share, and your required rate of return on equity investment is 10%? (show and label all calculations)

Step 1

According to the information provided, the stock has a current market price of \$80, with a dividend of \$4 next year and required rate of return of 10%.

Using single period Dividend Discount model

Step 2

Putting the value in the above equatio...

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