Question 5 Lincoln National ust paid out a dividend of 140 a

Question 5 Lincoln National ust paid out a dividend of $1.40 and dividends are expected to grow at 5% each year. If the required rate of return is 12%, what is the intrinsic value of the company\'s stock? Your answer should be between 14.75 and 78.62, rounded to 2 decimal places, with no special characters

Solution

Intrinsic value=D1/(Required return-Growth rate)

=(1.4*1.05)/(0.12-0.05)

which is equal to

=$21