What Is the Expected Price for the Stock of a Company

question 16

Multiple Choice

What is the expected price for the stock of a company that just paid a dividend of $3.00? The company has a dividend payout ratio of 50 percent,discount rate of 25 percent,and a P/E of 10.

• A) $60.00
• B) $30.00
• C) $12.00
• D) $45.00
• E) $22.50