mainfr.uni ing at a constant rate of 7.44 percent per year. The last dividend th

Question

mainfr.uni ing at a constant rate of 7.44 percent per year. The last dividend that the firm paid was $1.20 per share. I dividends are expected to grow at the same rate as the firm and the required rate of return on Burnes's stock is 13 percent, what is the market value of the company's stock? (Round answer to 2 decimal places, e.g. 52.75.) Market value of the company's stock By accessing this Question Assistance, you will learn while you earm points based on the Point Potential Policy set by your instructor. Question Attempts: 0 of 3 used SAVE FOR LATER SUBMIT ANSWER Earn Maximum Points available only if you answer this question correctly in two attempts or less.

Explanation / Answer

Market value of stock (P0) D1÷(r-g) Here, Expected dividend (D1) $                        1.29 1.2*(1+7.44%) Required return ( r) 13.00% Growth rate (g) 7.44% Market value of stock (P0) $                      23.19 1.29/(13%-7.44%)

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