Respuesta :
Answer:
$41.89
Explanation:
The computation of the fair value of the stock is shown below:
Fair Value of the stock = (Annual dividends) ÷ (Required rate of return - growth rate)
= $3.10 ÷ 7.4%
= $41.89
In order to compute the fair present value of the stock, we simply divided the annual dividend by the required rate of return so that the approximate value could come.
Answer:
present value of stock = $41.89
Explanation:
given data
annual dividends = $3.10
rate of return = 7.4 percent
solution
we get here fair present value of stock that is express as
present value of stock = Annual dividends ÷ Required return ....................1
put here value and we get
present value of stock = [tex]\frac{3.10}{0.074}[/tex]
solve it and we get
present value of stock = $41.89
