What price would you pay today for a stock if you require a rate of return of 13%,the dividend growth rate is 3.6%,and the firm recently paid an annual dividend of $2.50?
A) $27.55
B) $30.28
C) $26.60
D) $31.37

Name: What price would you pay today for a stock if you require a rate of return of 13%,the dividend growth rate is 3.6%,and the firm recently paid an annual dividend of $2.50? A) $27.55 B) $30.28 C) $26.60 D) $31.37
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Question

Quizplus · Accepted Answer

Price = ($2.50 × 1.036)/(0.13 − 0.036) = $27.55

What Price Would You Pay Today for a Stock If