Author Question: A stock just paid a dividend of $1.15, has a required rate of return of 10%, and a constant dividend ... (Read 94 times)

ts19998 · **on:** Apr 25, 2021

Question 1

A share of common stock has just paid a dividend of $2. If the expected long-run growth rate for this stock is 15%, and if investors require a 19% rate of return, what is the price of the stock?
◦ $57.50
◦ $62.25
◦ $71.86
◦ $64.00
◦ $44.92

Question 2

A stock just paid a dividend of $1.15, has a required rate of return of 10%, and a constant dividend growth rate of 3%. What price should this stock be selling for?
◦ $16.92
◦ $15.20
◦ $8.50
◦ $8.20
◦ $17.15

FergA · **Reply #1 on:** Apr 25, 2021

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