C. Constant-growth model 933. A share of common stock has iust naid a dividend of $1.00....

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C. Constant-growth model 933. A share of common stock has iust naid a dividend of $1.00. If the expected songs, run growth ra

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Answer 1

Answer #1

33.

P=D/(r-g)

Here,P is the price of the stock

D is the dividend paid

R is the rate of return

G os the expected growth

Thus,from the question we get

P=1/(19-10)*100

=1/9*100

=$11.11

34

.

Same formula

G=gamma or lets take x

R=11%

D=7%

P =CONSTANT

We know,

P=D/(R-G)

1=7/(11-G)

7=11-G

-4=-G

or, G =4%

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Answer 2

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