contestada

Financial analysts forecast Safeco Corp (SAF) growth for the future to be 10 percent. Safeco’s recent divided was $1,200. What is the fair present value of Safeco stock if the required rate of return is 12 percent?

Respuesta :

Answer:

price of stock is $66000

Explanation:

We have given dividend recent = $ 1200

Growth = 10% = 0.1

Required return = 12 % = 0.1

We have to calculate price of stock

Price of stock is given by

Price of stock [tex]=\frac{D_1}{r-g}[/tex], here r is required rate and g is growth

So price of stock [tex]=\frac{D_1}{r-g}=\frac{1200\times (1+0.1)}{0.12-0.1}=$66[/tex]

So the price of stock is [tex]=\frac{D_1}{r-g}=\frac{1200\times (1+0.1)}{0.12-0.1}=$66000[/tex]

Otras preguntas