Answer to Question #115917 in Finance for Derrick James

Question #115917
A company pays dividends of 5 dollars in one year. If investors require a return of 8% per annum and dividends are expected to grow at 2% what is the value of the company’ stock?
1
Expert's answer
2020-05-17T17:45:53-0400

Using Gordon Growth Model we can calculate value of company' stock:

dollars


P.S. If you need answer in the form of a decimal fraction:




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