What is the best estimate of current stock price

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Reference no: EM131514881

Ackert Company's last dividend was $4.00. The dividend growth rate is expected to be constant at 1.5% for 2 years, after which dividends are expected to grow at a rate of 8.0% forever. The firm's required return (rs) is 12.0%. What is the best estimate of the current stock price?

a. $104.21

b. $89.87

c. $95.61

d. $87.00

e. $80.31

2. O'Brien Ltd.'s outstanding bonds have a $1,000 par value, and they mature in 25 years. Their nominal annual, not semiannual yield to maturity is 9.25%, they pay interest semiannually, and they sell at a price of $875. What is the bond's nominal coupon interest rate?

a. 6.05%

b. 8.76%

c. 7.96%

d. 6.37%

e. 6.69%

Reference no: EM131514881

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