Course Materials Home Grades Personalized Reviews Discussion

Course Materials Home Grades Personalized Reviews Discussion nal Exam - Chapters 7-11,14,16 emaining: 111ts I Back to Assignme Deadline Today at 09:00 PM ATC Corp is expected to pay a $0.60 per share dividend at the end of the year (i.e,AZA D1 $0.60). The dividend is expected to grow at a constant rate of 8% a year. The required rate of return on the stock,rsA2A , is 1596, what is the stocke??s current value per share? 15. OA. $9.29 O B. $7.56 O C. $8.57 D. $10.58 Continue without saving Copyright Notices Terms of UsePrivacy NoticeSecurity Notice Accessibility

Solution

current price of share = Expected dividend next year (D1)/ (expected return - growth rate) = 0.6/(15%-8%) = 8.57