contestada

The Starr Co. just paid a dividend of $2.15 per share on its stock. The dividends are expected to grow at a constant rate of 5 percent per year, indefinitely. If investors require a return of 11 percent on the stock, what is the current price

Respuesta :

The current price is the most recent selling price of a stock, currency, commodity, or precious metal that is traded on an exchange and is the most reliable indicator of that security's present value.

According to the Question.

The Current Price would be $37.63

Investors and analysts use a variety of techniques to figure out the intrinsic value of common stock. A common technique is dividend discounting, which uses the needed rate to reduce the cash dividend.

Calculation for the current price

Current Price = Dividend × ( 1 + Growth Rate )

                                Return - Growth Rate

Current Price = $2.15 × ( 1 + 5% )

                               11% - 5%

Current Price = $2.15 × 1.05

                                6%

Current Price = $2.2575

                             0.06

Current Price = $37.63

To know more about Current Price, check the given links.

https://brainly.com/question/24155393

https://brainly.com/question/2983554

#SPJ4

Otras preguntas