Summit Systems will pay a dividend of $ 1.45 one year from now. If you expect...
Summit Systems will pay a dividend of $ 1.45 one year from now. If you expect Summit's dividend to grow by 5.7 % per year, what is its price per share if its equity cost of capital is 10.8 %?
The price per share is $
Homework Answers
Current price=D1/(equity cost of capital-Growth rate)
=1.45/(0.108-0.057)
which is equal to
=$28.43(Approx).
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Summit Systems will pay a dividend of $ 1.45 one year from now.
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