The next dividend is expected to be $1.80, growth rate is 6%, and the required rate of return is 13%. What is the stock price?

Question

Quizplus · Accepted Answer

The stock price can be calculated using the Gordon Growth Model (Dividend Discount Model): P = D / (r - g), where P is the price, D is the dividend, r is the required rate of return, and g is the growth rate. Plugging in the values: P = $1.80 / (0.13 - 0.06) = $25.71.

The Next Dividend Is Expected to Be $1