Company will increase its dividend payment at growth rate

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Reference no: EM13875959

ABC Inc. is expected to pay a dividend of $2.25 in the coming year (D₁ = $2.25). The company will increase its dividend payment at a growth rate of 4 percent every year indefinitely (g = 4.0%). If the required rate of return on the stock is 6%, what is the current value of the company’s stock?

1. $225.00

2. $56.25

3. $112.50

4. $$118.13

5. $37.50

Reference no: EM13875959

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