Assume Evco, Inc., has a current stock price of $39 and will pay a $1.80 dividend in one year; its equity cost of capital is 13%. What price must you expect Evco stock to sell for immediately after the firm pays the dividend in one year to justify its current price? The expected price is $_______. (Round to the nearest cent.)
Assume Evco, Inc., has a current stock price of $39 and will pay a $1.80 dividend in one year; its equity cost of capital is 13%. What price must you expect Evco stock to sell for immediately after the firm pays the dividend in one year to justify its current price? The expected price is $_______. (Round to the nearest cent.)
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter7: Corporate Valuation And Stock Valuation
Section: Chapter Questions
Problem 16MC: Assume that Temp Force is a constant growth company whose last dividend (D0, which was paid...
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Assume Evco, Inc., has a current stock price of $39 and will pay a $1.80 dividend in one year; its equity cost of capital is 13%. What price must you expect Evco stock to sell for immediately after the firm pays the dividend in one year to justify its current price?
The expected price is $_______. (Round to the nearest cent.)
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