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Homework answers / question archive / Today your company paid a dividend of $2 per share
Today your company paid a dividend of $2 per share. The growth rate of the dividend is expected to be constant at 10% per year. The required return is 15%. What is your firm’s stock currently worth?
A) $$1.91 B) $13.33 C) $14.67 D) $40
E) $44
Current price=D1/(Required return-Growth rate)
=(2*1.1)/(0.15-0.1)
which is equal to
=$44
