A share of common stock just paid a dividend (DO) of $3.00. If the expected long-run growth rate for this stock is 5%, and if investors' required rate of return is 10%, what is the current stock price (PO)?

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 8P: A stock is trading at $80 per share. The stock is expected to have a yearend dividend of $4 per...
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A share of common stock just paid a dividend (DO) of $3.00. If the
expected long-run growth rate for this stock is 5%, and if investors'
required rate of return is 10%, what is the current stock price (PO)?
Transcribed Image Text:A share of common stock just paid a dividend (DO) of $3.00. If the expected long-run growth rate for this stock is 5%, and if investors' required rate of return is 10%, what is the current stock price (PO)?
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