Sorvino Co. 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, accordingto the dividend discount model, is $____.
A) 4.06
B) 4.16
C) 40.63
D) 24.62
E) none of the above

Question

Quizplus · Accepted Answer

The Answer of Sorvino Co. 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, accordingto the dividend discount model, is $____.
A) 4.06
B) 4.16
C) 40.63
D) 24.62
E) none of the above