Sorvino Company is expected to offer a dividend of $3.20 per share per year forever. The required rate of return on Sorvino stock is 13 percent. Thus, the price of a share of Sorvino stock, according to the dividend discount model, is $____.
A)4.06
B)4.16
C)40.63
D)24.62
E)None of these are correct.

Question

Quizplus · Accepted Answer

The Answer of Sorvino Company is expected to offer a dividend of $3.20 per share per year forever. The required rate of return on Sorvino stock is 13 percent. Thus, the price of a share of Sorvino stock, according to the dividend discount model, is $____.
A)4.06
B)4.16
C)40.63
D)24.62
E)None of these are correct.

Sorvino Company Is Expected to Offer a Dividend of $3