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Dropshot Corporation stock currently sells for $64.53 per share. The market requires a return of 8 percent on the firm’s stock. If the company maintains a constant 5.5 percent growth rate in dividends, what was the most recent dividend per share paid on the stock?

Respuesta :

zainsubhani

Answer:

D=$1.52914

The most recent dividend per share paid on the stock is $1.52914.

Explanation:

Formula we are going to use is:

[tex]P=D*\frac{1+g}{r-g}[/tex]

Where:

P is the current selling price

D is he recent dividend per share

g is the growth rate

r is the rate of return

Above formula will become:

[tex]D=\frac{P*(r-g)}{1+g} \\D=\frac{\$64.53*(0.08-0.055)}{1+0.055}[/tex]

D=$1.52914

The most recent dividend per share paid on the stock is $1.52914.

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