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DWI has just paid an annual dividend of $2 per share, which is expected to grow at 5% indefinitely. If your client's required rate of return to meet her retirement goals is 12%, what is the intrinsic value of the stock using the constant growth dividend discount model?

Respuesta :

Karabo99

Answer:

The intrinsic value of the stock using the constant growth dividend discount model is $30.00

Explanation:

intransic value of the stock = [2*(1 + 0.05)]/(0.12 - 0.05)

                                              = $30.00

Therefore, The intrinsic value of the stock using the constant growth dividend discount model is $30.00

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