Answered

Discover the answers you need at Westonci.ca, where experts provide clear and concise information on various topics. Get immediate and reliable solutions to your questions from a knowledgeable community of professionals on our platform. Join our platform to connect with experts ready to provide precise answers to your questions in different areas.

What is the value of Company X stock if the dividend next year will be $3 and is expected to grow at a rate of 4% forever if your required return is 10.74%

Sagot :

facundobuzzetti

Answer:

PV= $44.51

Explanation:

Giving the following information:

Dividen 1= $3

Discount rate= 10.74% = 0.1074

Growth rate= 4% = 0.04

To calculate the price of the stock today, we need to use the following formula:

PV= D1 / (i - g)

PV= 3 / (0.1074 - 0.04)

PV= 3 / 0.0674

PV= $44.51

Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. Stay curious and keep coming back to Westonci.ca for answers to all your burning questions.