Problem:
The Isberg Company just paid a dividend of $0.75 per share, and that dividend is expected to grow at a constant rate of 5.50% per year in the future. The company's beta is 1.80, the market risk premium is 5.00%, and the risk-free rate is 4.00%.
Required:
Question: What is the company's current stock price?
a. $10.55
b. $11.39
c. $11.92
d. $12.87
e. $11.08
Note: Show supporting computations in good form.