Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. jk stock currently sells for $50 a share. the stoc

jk stock currently sells for $50 a share. the stock has just paid a dividend of...

50.1K

Verified Solution

Question

Finance

jk stock currently sells for $50 a share. the stock has justpaid a dividend of $2 a share. the dividend is expected to grow ata constant rate of 6% per year. what is the stock price that wouldbe expected in one year from now? what is the required rate ofreturn on jks stock?.

Answer & Explanation Solved by verified expert
3.5 Ratings (605 Votes)
Solution Calculation of Required rate of return of stock As per the Gordon growth Model price of a stock is calculated using the following formula P0 D0 1 g ke g Where P0 Current Price of the stock D0 Dividend paid in Year 0 ie    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Physics
1.2K views

For years, the young Taco Prince knew he would one day be forced to battle his...

Biology
1.2K views

One type of cancer is caused by a dominant mutation that causes the protein Raf...

Physics
1.2K views

A uniform solid cylinder of mass M and radius R rolling without sliding on a...

Geometry
1.2K views

What is the correct term for a figure that has vertices at 1 3 5...

Geometry
1.2K views

1 Complete the two column proof 3 points Given Triangle ACD is isosceles with segment...

Basic Math
1.2K views

What would happen if when entering a transaction from June 2 you accidentally transposed the...

Basic Math
1.2K views

In rhombus ABCD DB 8 and AC 12 Find DC a 50 b 2 13...

Basic Math
1.2K views

Diana has 440 yards of fencing and wishes to enclose a rectangular area.(a) Express the...

Basic Math
1.2K views

1. For the given function: y = x(x + 2)(x + 1)A. What is the...

Calculus
1.2K views

Rewrite the Cartesian equation a r 0 Enter theta for 8 if needed 3 as...

Accounting
1.2K views

A company has $97,000 in outstanding accounts receivable and it uses the allowance method to...

Finance
1.2K views

A firm's Income statement included the following data. The firm's average tax rate was 20%....