Thank you for visiting Tresnan Brothers is expected to pay a 1 70 per share dividend at the end of the year i e tex D 1 1 70. This page is designed to guide you through key points and clear explanations related to the topic at hand. We aim to make your learning experience smooth, insightful, and informative. Dive in and discover the answers you're looking for!
Answer :
The current value per share of Tresnan Brothers stock is $17.
To calculate the stock's current value per share, we can use the dividend discount model (DDM) formula:
Stock Value = Dividend / (Required Rate of Return - Dividend Growth Rate)
Given that the dividend at the end of the year is $1.70 (Dâ‚) and the dividend growth rate is 3% (g), and the required rate of return on the stock is 15% (rs), we can plug these values into the formula:
Stock Value = $1.70 / (0.15 - 0.03) = $1.70 / 0.12 = $14.17
Therefore, the stock's current value per share is approximately $14.17.
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