Answer:
$94.93
Explanation:
In this question we are asked to calculate the current price of the stock.
To answer the question, we employ a mathematical approach.
The current price of the stock is computed as shown below:
Present value = Future value / (1 + r )^n
where r is the required return and n is the number of years
Future value is calculated as follows:
= Annual dividend / required return
= $ 5.95 / 0.0405
= $146.91 Approximately
So the present value will be:
= $ 146.91/ 1.0405^11
= $94.93 Approximately
