contestada

Teder Corporation stock currently sells for $80 per share. The market requires a 13 percent return on the firm's stock.


Required :

If the company maintains a constant 7 percent growth rate in dividends, what was the most recent dividend per share paid on the stock?


a.$6.67

b.$16.07

c.$4.31

d.$4.80

e.$4.49

Respuesta :

Answer:

e)  $4.49

Explanation:

We can use Gordon growth model to calculate the stock price:

P = Do (1+g) / r-g

P: Stock price

Do: Most recent Dividend per share

g: Dividend growth rate

r: required rate of return

We have:

80 = Do x (1+0.07) / (0.13-0.07)

--> Do = $4.49

Otras preguntas