question archive Suppose stock is expected to pay a $0
Suppose stock is expected to pay a $0
Subject:FinancePrice:2.86 Bought8
Suppose stock is expected to pay a $0.50 dividend every six month and the required return is 10% with semiannual compounding. What is the price?
A) 32 B) 25 C) 13 D) 11 E) 10
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Assuming stock would be paying same dividend every 6 months as growth rate is not given.
| Stock price = Dividend / Required return |
| Stock price = 0.50 / 5% |
| Stock price = 10 |
| Answer : E) 10 |
