If the last dividend on Markowitz Trucking stock was $2 per share and if dividends are expected to grow 10% annually,what is the share price if the required return is 12%?

Question

Quizplus · Accepted Answer

Step 1 - Calculate the next dividend payment.
2 × (1.10) = $2.20
Step 2 - Plug the next dividend payment into the Gordon Model. 11ea7fdb_fbf7_ae87_a768_617298048b44_TB2902_11 = 11ea7fdb_fbf7_ae88_a768_e71e602763e7_TB2902_11 11ea7fdb_fbf7_ae89_a768_cbb3ed79f78f_TB2902_11 = 11ea7fdb_fbf7_d59a_a768_dbe0bb5f13f8_TB2902_11 = $110

If the Last Dividend on Markowitz Trucking Stock Was $2