Today, Apple paid a $1.50 dividend (it pays dividends semi- annually). Future dividends are expected to grow at the constant rate of 2% per semi- annual period. If the effective semi-annual rate is 6% what is the current stock price of apple?
Today, Apple paid a $1.50 dividend (it pays dividends semi- annually). Future dividends are expected to grow at the constant rate of 2% per semi- annual period. If the effective semi-annual rate is 6% what is the current stock price of apple?
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
Related questions
Question
- Today, Apple paid a $1.50 dividend (it pays dividends semi- annually). Future dividends are expected to grow at the constant rate of 2% per semi- annual period. If the effective semi-annual rate is 6% what is the current stock price of apple?
Please show formulas and procedure used. Thanks!
Expert Solution
Given Information:-
Dividend paid is $1.50
Dividend growth rate is 2% per semi annual period
Effective semi annual rate is 6%
To Find:-
- Current Stock Price
Step by step
Solved in 2 steps
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