A Stock Offers an Expected Dividend of $3

question 129

Essay

A stock offers an expected dividend of $3.50, has a required return of 14 percent, and has historically exhibited a growth rate of 6 percent.Its current price is $35.00 and shows no tendency to change.How can you explain this price based on the constant growth dividend discount model?

---

Definitions:

Deformities

are physical abnormalities or misshapen parts of the body, often present from birth or developed later in life, that deviate from the normal shape or size.

Rubella

A contagious viral infection best known by its distinctive red rash, also known as German measles.

Deafness

Deafness is a condition characterized by the partial or complete inability to hear, which can result from genetic factors, age, exposure to loud noise, illnesses, or injuries.

Emerging Adulthood

A phase of life between adolescence and full-fledged adulthood, characterized by exploration and instability in love, work, and worldviews.