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If Citi Bank stock is expected to pay a dividend of $30 per year for unlimited...

If Citi Bank stock is expected to pay a dividend of $30 per year for unlimited years and investors requires a 15% annual return, what is the value of Citi Bank stock after 15% tax rebate?  

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Answer #1
As per dividend discount model, current share price is the present value of future dividends.
Value of stock = Annual dividend / Required return
= $    30.00 / 15%
= $ 200.00
Note:
Dividend is paid from net profit after tax.So, tax has no impact on valuation of stock as per dividend discount model.
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