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What Should Be the Price of a Stock That Offers

question 65

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What should be the price of a stock that offers a $4 annual dividend with no prospects of growth, and has a required return of 12.5 percent?


Definitions:

Points

Specific locations in a space, defined by coordinates, with no dimension or size.

Slope

The measure of the steepness of a line, typically represented as the ratio of the vertical change to the horizontal change between two points on the line.

Points

The basic unit of geometry, representing a location in space with no dimension.

Slope

In mathematics, specifically in algebra and geometry, it refers to the measure of the steepness or incline of a line, represented as a ratio of the vertical change to the horizontal change between two points on the line.

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