The Zumwalt Company is expected to pay a dividend of $2.25 per share at the end of the year, and that dividend is expected to grow at a constant rate of 5.00% per year in the future. The company's beta is 1.15, the market risk premium is 5.50%, and the risk-free rate is 4.00%. What is the current stock price?
The current stock price is the present value of all dividends. Since the dividends grow at a constant ...
The solution explains how to calculate the current stock price using the dividend discount model.