Problem:
A stock's expected dividend payment at the end of the year (d1) is $1. the required rate of return is r(s)= 11%, and the growth rate of the dividend is constant at 5%.
Required:
Question: What is the current stock price?
- 16.67
- 18.83
- 20.00
- 21.67
- 23.33
Note: Provide support for your underlying principle.