Provide correct answer general Accounting question XYZ, Inc. is expected to pay a dividend of$1.33. The dividends are expected to grow at7.74% each year forever. The required rate ofreturn on the stock is 22.73%. What is today'sprice of the stock? Round your answer to twodecimal points.

Step 1: Define Types of Stock PriceStock price can be of two types: the fair price or the…

Answered: XYZ, Inc. is expected to pay a dividend…

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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XYZ, Inc. is expected to pay a dividend of $1.33. The dividends are expected to grow at 7.74% each year forever. The required rate of return on the stock is 22.73%. What is today's price of the stock? Round your answer to two decimal points.