Furniture is expected to pay a dividend of D1 = $1.25 per share at the end of the year, and that dividend is expected to grow at a constant rate of 6.00% per year in the future The company's beta is 1.15, the market risk premium is 5.50%, and the risk-free rate is 4.00% What is Dyer's current stock price?

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The correct answer is A.The current stock price can be calculated using the Gordon Growth Model:P0 = D1 / (r - g)where:P0 is the current stock priceD1 is the expected dividend at the end of the yearr is the required rate of returng is the expected growth rate of dividendsIn this case, D1 = $1.25, r = 4.00% + 1.15 * 5.50% = 9.28%, and g = 6.00%. Plugging these values into the formula, we get:P0 = $1.25 / (0.0928 - 0.06) = $28.90

Furniture Is Expected to Pay a Dividend of D1 =