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Given a required return of 15%, what should the stock sell for today

Biogenetics, Inc. plans to retain and reinvest all of their earnings for the next 30 years. Investors believe that in the beginning of year 31, the firm will begin to pay a dividend of $12.00 per share. The dividend is expected to remain at the same level thereafter. Given a required return of 15%, what should the stock sell for today?

A) $1.05
B) $1.21
C) $1.39
D) $42.00
E) $80.00

Solution Summary

This job evaluates stock sell.

$2.19