Question

Perrine Industrial Inc. just paid a dividend of $5 per share. Future dividends are expected to grow at a constant rate of 7% per year. What is the value of the stock if the required return is 16%

Answer 1

$59.44

Step-by-step explanation:

Calculation for What is the value of the stock if the required return is 16%

Value of the stock= (5.00* 1.07) / 16% - 7%

Value of the stock= = 5.35 / .09

Value of the stock= $59.44

Therefore the value of the stock if the required return is 16% is $59.44