Avril Synchronistics will pay a dividend of $1.10 per share this year. It is expected that this dividend will grow by 4% each year in the future. What will be the currentvalue of a single share of Avril's stock if the firm's equity cost of capital is 13%?A. $8.55B. $12.22C. $13.44D. $9.17

Calculation of current value of share: Answer: Current value of share of Avril’s stock is $12.22.…

Answered: Avril Synchronistics will pay a…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Avril Synchronistics will pay a dividend of $1.10 per share this year. It is expected that this dividend will grow by 4% each year in the future. What will be the current value of a single share of Avril's stock if the firm's equity cost of capital is 13%? A. $8.55 B. $12.22 C. $13.44 D. $9.17