What should the price of a share of common stock be according to dividend valuation model if the dividends are expected to stay at $1 per share indefinitely and the investors' discount rate is 10 percent?

Question

Quizplus · Accepted Answer

The price of the stock is calculated using the formula P = D / r, where P is the price, D is the dividend, and r is the discount rate. Here, P = $1 / 0.10 = $10.

What Should the Price of a Share of Common Stock