Popovich Corp. is just about to pay an annual dividend of $3.31 per share. Investors anticipate...
Popovich Corp. is just about to pay an annual dividend of $3.31 per share. Investors anticipate that the annual dividend will rise by 4.29% a year forever. The applicable annual discount rate is 10.14%. What is the price of the stock today?
Hint: apply the constant dividend growth model to determine the value of the future annual dividends. Then add the dividend that will be paid soon to this result.
Do not round at intermediate steps in your calculation. Round to two decimal places. Do not type the $ symbol.
Homework Answers
Price of the stock today = Imminent dividend + Present value of all dividends beginning a year from now
Price of the stock today = $3.31 + [($3.31 × 1.0429) / (0.1014 - 0.0429)]
Price of the stock today = $62.32
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