What should be the price of a share that constantly pays $2.50 annually in dividends,if the growth rate is zero and the required rate of return is 8% per annum?

Name: What should be the price of a share that constantly pays $2.50 annually in dividends,if the growth rate is zero and the required rate of return is 8% per annum?
Brand: Quizplus
Rating: 4.7 (53 reviews)

Question

Quizplus · Accepted Answer

The price of a share with zero growth is calculated using the formula: Price = Dividend / Required Rate of Return. Here, Price = $2.50 / 0.08 = $31.25.

What Should Be the Price of a Share That Constantly