General accounting Green Tech Solutions will pay a dividend on common stock of $2.50per share at the end of the year. The required return on common stock(Ke) is 12% and the firm has a constant growth rate of 7%. What is thecurrent price of the stock (PO)?

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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 16MC

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Green Tech Solutions will pay a dividend on common stock of $2.50 per share at the end of the year. The required return on common stock (Ke) is 12% and the firm has a constant growth rate of 7%. What is the current price of the stock (PO)?