A stock is expected to pay a dividend of Php0.75 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? Group of answer choices Php18.29 Php19.22 Php17.39 Php17.84 Php18.75

A stock is expected to pay a dividend of Php0.75 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? Group of answer choices Php18.29 Php19.22 Php17.39 Php17.84 Php18.75

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A stock is expected to pay a dividend of Php0.75 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%. What is the stock's current price?

Group of answer choices

Php18.29

Php19.22

Php17.39

Php17.84

Php18.75

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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