Question

(Common stock valuation​) Sanford common stock is expected to pay ​$1.501.50 in dividends next​ year, and...

(Common

stock

valuation​)

Sanford common stock is expected to pay

​$1.501.50

in dividends next​ year, and the market price is projected to be

​$52.2552.25

per share by​ year-end. If investors require a rate of return of

1313

​percent, what is the current value of the​ stock?

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Answer #1

Common Stock Value price year/ (1+required a rate of return) + dividend year/(1+require a rate of return) (52.25/(1+0.13))+(1

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