What is the price of the stock economics today

Reference no: EM133200008 , Length: Words Count:150

Assignment:

Answer the following questions:

a. The price of a stock when you sell it in a year is predicted to be $65. If dividend is expected to be $1.5 next year, and the required return is 4.5%, what should be the price of the stock today?

b. You believe that a corporation's dividends will grow 5 percent on average into the foreseeable future. If the yearly dividend payment is $2, assuming a 4 percent required return, what is the price of the stock today?

Reference no: EM133200008

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