How Much of a Stock's $30 Price Is Reflected in PVGO

question 13

Multiple Choice

How much of a stock's $30 price is reflected in PVGO if it expects to earn $4 per share, has an expected dividend of $2.50, and a required return of 20 percent?

• A)$0
• B)$6.00
• C)$8.00
• D)$10.00 P = $4/.2 if all earnings paid as dividends