What is the highest price this analyst thinks Walnut funds

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Question - The company paid a dividend of $1.46 per share quarterly, totaling to $5.84 for the most recent full year, on its common stock. Based on a study of the risk of owning this stock, analysts at Walnut Investment Funds have determined that the required annual rate of return should be ke or r = 8.6%. The first analyst, Ms. Branch, feels that the per-share dividend will remain close to the most recent year's level for many years into the future, such that the stock's value can sensibly be modeled as a perpetuity. What is the highest price this analyst thinks the Walnut funds should be willing to pay for a share of Tupelo Turbine Corporation's common stock?

A. $50.22

B. $67.91

C. $211.59

D. $11.63

E. $73.75

Reference no: EM132957249

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