Explore BrainMass
Share

Details regarding Stock valuation

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

Gerald's Travel Service just paid $1.79 to its shareholders as the annual dividend. Simultaneously, to company announced that future dividends will be increased by 3.2 %. If you require a 10.5% rate of return, how much are you willing to pay to purchase one share of this stock?

© BrainMass Inc. brainmass.com October 15, 2018, 6:51 am ad1c9bdddf - https://brainmass.com/business/real-options-valuation/details-regarding-stock-valuation-173002

Solution Preview

The price will be the present value of all dividends, since the growth rate in ...

Solution Summary

The solution explains how to calculate the price of stock.

$2.19