Synovec Corporation is expected to pay the following dividends over the next four years: $6.10, $17.10, $22.10, and $3.90. Afterward, the company pledges to maintain a constant 5.25 percent growth rate in dividends forever. If the required return on the stock is 8 percent, what is the current share price? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Share price

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 17P
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If the required return on the stock is 8 percent, what is the current share price?

Synovec Corporation is expected to pay the following dividends over the next four
years: $6.10, $17.10, $22.10, and $3.90. Afterward, the company pledges to maintain a
constant 5.25 percent growth rate in dividends forever.
If the required return on the stock is 8 percent, what is the current share price? (Do not
round Intermediate calculations and round your answer to 2 decimal places, e.g.,
32.16.)
Share price
Transcribed Image Text:Synovec Corporation is expected to pay the following dividends over the next four years: $6.10, $17.10, $22.10, and $3.90. Afterward, the company pledges to maintain a constant 5.25 percent growth rate in dividends forever. If the required return on the stock is 8 percent, what is the current share price? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Share price
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