The next year the common stock of Silver Corp

Finance Mar 08, 2021

The next year the common stock of Silver Corp. will pay a dividend of $9.65 per share If the company is growing at a rate of 4.69 percent per year, and your required rate of return is 10.39 percent, what is Silver's company stock worth to you?

Expert Solution

Computation of Current Stock Price:

Current Stock Price = Dividend for Next Year/(Required Rate of Return - Growth Rate)

= $9.65 / (10.39%-4.69%)

Current Stock Price = $169.30

Silver's company stock worth to you is 169.30

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