Constant Growth DDM A stock just paid a dividend of $0.90 per share. Dividends are expected to grow at a constant rate of 7% per year forever. Investors expect and require a 11% return on this investment. The intrinsic value of this stock is a) $24.08 b) $23.52 c) $23.83 d) $23.63

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
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Constant Growth DDM A stock just paid a dividend
of $0.90 per share. Dividends are expected to grow
at a constant rate of 7% per year forever. Investors
expect and require a 11% return on this investment.
The intrinsic value of this stock is
a) $24.08
b) $23.52
c) $23.83
d) $23.63
Transcribed Image Text:Constant Growth DDM A stock just paid a dividend of $0.90 per share. Dividends are expected to grow at a constant rate of 7% per year forever. Investors expect and require a 11% return on this investment. The intrinsic value of this stock is a) $24.08 b) $23.52 c) $23.83 d) $23.63
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