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Sagot :
A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is r_s = 10.5%, and the expected constant growth rate is g = 6.4%. The stock's current price is $18.29.
What is the stock's current price calculation and what ids stock?
Calculation of stock's current price:
Stock′s current price = Dividend ÷ Required rate of return - growth rate
Stock′s current price = $0.75÷ 10.5% - 6.4%
Stock′s current price = $0.75 ÷ 4.1%
Stock′s current price = $0.75÷ 0.041
Stock′s current price = $18.29
A stock can be understood as a general term used to describe the ownership certificates of any company. On the other hand, share refers to the stock certificate of a particular company. When we hold a particular company's share it makes usa shareholder. Stocks are of two types, they are common and preferred.
The difference is while the holder of the former has voting rights that can be exercised in corporate decisions, the latter doesn't.
Learn more about stock, here:
https://brainly.com/question/28663581
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Your question is incomplete, but most probably your full question was,
A stock is expected to pay a dividend of $0.75 at the end of the year. the required rate of return is r_s = 10.5%, and the expected constant growth rate is g = 6.4%. Find the stock's current price?
a. $17.29
b. $18.29
c. $16.00
d. $12.00
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