We appreciate your visit to You own a stock of YouEmDee Inc They just paid a dividend of 1 USD The growth rate of dividends for the next two years. This page offers clear insights and highlights the essential aspects of the topic. Our goal is to provide a helpful and engaging learning experience. Explore the content and find the answers you need!
Answer :
The stock price today should be $100. So, the correct option is C. 100 USD.
To determine the stock price today, we can use the Gordon Growth Model, also known as the Dividend Discount Model (DDM):
Stock Price = Dividend / (Required Return on Equity - Growth Rate)
In this case, the dividend for the next two years is $1, and the growth rate of dividends for the next two years is 1%. The required return on equity is 2%, which remains constant.
Using the formula:
Stock Price = $1 / (0.02 - 0.01)
Stock Price = $1 / 0.01
Stock Price = $100
Therefore, the stock price today should be $100. So, the correct option is C. 100 USD.
Learn more about stock from the given link
https://brainly.com/question/26128641
#SPJ11
Thanks for taking the time to read You own a stock of YouEmDee Inc They just paid a dividend of 1 USD The growth rate of dividends for the next two years. We hope the insights shared have been valuable and enhanced your understanding of the topic. Don�t hesitate to browse our website for more informative and engaging content!
- Why do Businesses Exist Why does Starbucks Exist What Service does Starbucks Provide Really what is their product.
- The pattern of numbers below is an arithmetic sequence tex 14 24 34 44 54 ldots tex Which statement describes the recursive function used to..
- Morgan felt the need to streamline Edison Electric What changes did Morgan make.
Rewritten by : Barada
