Ask Question
14 November, 06:11

Hi-Tek plans to pay a $6 per share dividend one year from today, and will increase the dividend by 4 percent per year forever. What is the current share price if the required return on this stock is 16 percent

+1
Answers (1)
  1. 14 November, 06:39
    0
    The current share price if the required return on this stock is 16 percent is $50.

    Explanation:

    price = dividend next year / (required rate of return - growth rate)

    = 6 / (16% - 4%)

    = 50

    Therefore, The current share price if the required return on this stock is 16 percent is $50.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Hi-Tek plans to pay a $6 per share dividend one year from today, and will increase the dividend by 4 percent per year forever. What is the ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers