Problem 7-7 Stock Valuation [LO 1] Bowman Corp. pays a constant $13.80 dividend
ID: 2698874 • Letter: P
Question
Problem 7-7 Stock Valuation [LO 1]
Bowman Corp. pays a constant $13.80 dividend on its stock. The company will maintain this dividend for the next seven years and will then cease paying dividends forever.
If the required return on this stock is 9 percent, what is the current share price? (Do not include the dollar sign ($). Round your answer to 2 decimal places (e.g., 32.16).)
Bowman Corp. pays a constant $13.80 dividend on its stock. The company will maintain this dividend for the next seven years and will then cease paying dividends forever.
Explanation / Answer
current price is
13.8/1.09 + ... + 13.8/1.09^7 = $69.45