(Q18 IN TYPE B) HOW MUCH SHOULD YOU PAY TODAY FOR A STOCK PER SHAR...
18. (Q18 in Type B) How much should you pay today for a stock per share that offers a constant growth rate of 9% for dividends, requires a 12% rate of return, and is expected to sell for $40 one year from now? A) $35.71. B) $38.83. C) $41.20. D) $44.80. Solution: B The easiest way to solve this problem is to realize that: Cap Gain return + Div Yield = 12% Cap Gain return = 12% - 9% = 3% P
0
= P1
/ (1.03) P0
= $40/(1.03) = $38.83Bạn đang xem 18. - EXAM SOLUTION 7 FUNDAMENTALS OF CORPORATE FINANCE, 4TH EDITION BREALEY
