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NoGrowth Corporation currently pays a dividend of $0.48 per​ quarter, and it will continue to pay...

NoGrowth Corporation currently pays a dividend of $0.48 per​ quarter, and it will continue to pay this dividend forever. What is the price per share of NoGrowth stock if the​ firm's equity cost of capital is 11.9%​?

The stock price is $

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Answer #1
As per dividend discount model, current value of stock is the present value of future dividend which is derived from the following formula.
Present value of future dividends = D/Ke Where,
= $       0.48 / 2.98% D Dividend = $       0.48
= $    16.13 Ke Required rate of return 11.9%/4 = 2.98%
So, The stock price is $    16.13
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