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Dividend and Discount Rate: Williams Inc.

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Williams Inc. is expected to pay a $3 dividend next year and that dividend is expected to grow at 4% every year thereafter. If the discount rate is 10%, what would be the present value of the expected dividend stream (aka the expected price of the firm's stock)?

a. 50.00
b. 30.00
c. 0.50
d. 75.00
e. 55.00.

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Solution Summary

Dividend and discount rates for William Inc are examined. The present value of the expected dividend stream are examined.

Solution provided by:
Manal Elkhoshkhany, MBA
Education
  • BA, Ain Shams University, Cairo Egypt
  • MBA, California State University, Sacramento
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