Question

A Corporation will a dividend of $8.00 per share, and that dividend is expected to grow...

A Corporation will a dividend of $8.00 per share, and that dividend is expected to grow at a constant rate of 5% per year in the future. The company’s beta is 1.50, the market return is 6.50%, and the risk-free rate is 3.50%. What is the company’s current stock price?

A.

$280.00
B.

$96.97
C.

$266.67
D.

$101.82

Answers D is incorrect. which one is correct and why?

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Answer #1

Answer :- Option C is Correct. The Explanation has been provided below:-

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