A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is 10.5%, and the expected constant growth rate is 7.5%. What is the stock's current price? a. $27.72 b. $25 c. $30.44 d. $29.08 e. $26.36

A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is 10.5%, and the expected constant growth rate is 7.5%. What is the stock's current price? a. $27.72 b. $25 c. $30.44 d. $29.08 e. $26.36

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 8P: A stock is trading at $80 per share. The stock is expected to have a yearend dividend of $4 per...

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Question

Subject: general Accounting

A stock is expected to pay a dividend of $0.75 at the
end of the year. The required rate of return is 10.5%,
and the expected constant growth rate is 7.5%.
What is the stock's current price?
a. $27.72
b. $25
c. $30.44
d. $29.08
e. $26.36

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