Beplay stock is selling for 44.38? Their long run growth rate is 6.8% and their required...
Beplay stock is selling for 44.38? Their long run growth rate is 6.8% and their required return return is 12.6%. What was the most recent dividend paid by Beplay?
Homework Answers
HI,
Here stock price P = 44.38
growth rate g= 6.8%
required return r = 12.6%
most recent dividend paid D0=?
as per dividend discount model
stock price P= D0*(1+g)/(r-g)
44.38 = D0*(1+6.8%)/(12.6%-6.8%)
44.38*0.058=D0*1.068
2.574 = D0*1.068
D0 = $2.41
Hence most recent dividend is $2.41
Thanks
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