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Bizhelp
Bizhelp, CPA
Category: Single Problem
Satisfied Customers: 5884
Experience:  BA degree and Certified Public Accountant
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A stock is expected to pay a dividend of $0.75 at the end of

Resolved Question:

A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is rs = 10.5%, and the expected constant growth rate is g = 6.4%. What is the stock's current price?
Submitted: 4 years ago.
Category: Single Problem
Expert:  Bizhelp replied 4 years ago.
Hi,

Thanks for the question.

P = D1/(r-g)
P = 0.75 / (0.105 - 0.064)
P= 0.75 / 0.041
P=$18.29

Hope this helps!!


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