Pharmecology just paid an annual dividend of $1.50 per share. It's a mature company, but future EPS and dividends are expected to grow with inflation, which is forecasted at 3.50% per year. The nominal cost of capital is 10.25%. a. What is Pharmecology's current stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete and correct. Current stock price 23.00 O b. What would be Pharmecology's current stock price using forecasted real dividends and a real discount rate? (Do not round intermediate calculations. Round your answer to 2 decimal places.) X Answer is complete but not entirely correct.
Pharmecology just paid an annual dividend of $1.50 per share. It's a mature company, but future EPS and dividends are expected to grow with inflation, which is forecasted at 3.50% per year. The nominal cost of capital is 10.25%. a. What is Pharmecology's current stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete and correct. Current stock price 23.00 O b. What would be Pharmecology's current stock price using forecasted real dividends and a real discount rate? (Do not round intermediate calculations. Round your answer to 2 decimal places.) X Answer is complete but not entirely correct.
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 25P
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