Answer:
$24.61
Explanation:
Nearside corporation paid a dividend of $1.15 per share on their stocks.
The dividend have a growth rate of 7% pet year
= 7/100
= 0.07
The required rate of return on the stock is 12%
= 12/100
= 0.12
Therefore, the current price can be calculated as follows
Po= Do(1+g)/(R-g)
where Do= 1.15, g= 0.07, R= 0.12
Po= 1.15(1+0.07)/(0.12-0.07)
Po= 1.15(1.07)/0.05
Po= 1.2305/0.05
Po= $24.61
Hence the current price is $24.61
