What is the new share price for apple stock

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Suppose that the current share price of Apple common stock is $172. The projected annual dividend for the upcoming year is $2.74 per share. This dividend is set by the board, and it is not expected to change. (Caution: this amount is NOT the most recent dividend, D0. It is the projected dividend in one year, D1.)

Analysts forecast the annual growth rate in dividends will be 9.2%; assume that this growth rate is not affected by interest rate changes.
Suppose that interest rates suddenly rise by 1.1%. Assume that Apple's discount rate rises by the same amount. (For example, if the current discount rate is 8% and interest rates rise by 2%, then the new discount rate will be 8% + 2% = 10%.)

Problem 1: What is the new share price for Apple stock? (Hint: assume that the constant growth rate DDM is valid.)

Express your answer in dollars to two decimal places; do not type the $ symbol. Thus, for example, enter a $123.5782 as 123.58

Reference no: EM132662555

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