Business
16.06.2023 11:30
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Cape Corp. will pay a dividend of $4.50 next year. The company has stated that it
Cape Corp. will pay a dividend of $4.50 next year. The company has stated that it will maintain a constant growth rate of 5.25 percent a year forever. a. If you want a return of 18 percent, how much will you pay for the stock
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chrissy5189
5,0(1 marks)
a. $35.29
b. $78.26
Explanation:
Question b. Current stock price if return is 11%
a. Current stock Price (P0) = Next year dividend / (Ke - Growth)
If return is = 18%
Current stock Price = 4.5 / (0.18 - 0.0525 = $35.29
b. Current stock Price (P0) = Next year dividend / (Ke - Growth)
If return is = 11%
Current stock Price = 4.5 / (0.11 - 0.0525) = $78.26
marisolishwerd2265
4,6(64 marks)
Yes, it is very good. If you put with like some meat and cheese it is very good.
Explanation:
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