Hi expert please give me answer general accounting The interest rate is 6%. Microsoft stock pays annual dividendsthat start at $12 next year and then grow by 2.5% every yearthereafter, forever.a. What should be the price of Microsoft stock? What is the P/Eratio?b. What should its price be if dividends grow at 4% per year?What is the P/E ratio now?

To solve this, we use the Gordon Growth Model (GGM) to calculate the price of the stock. The formula…

Answered: The interest rate is 6%. Microsoft…

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 3P

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