Word problem on common stock

Business & Finance
Tutor: None Selected Time limit: 1 Day

The next year the common stock of Gold Corp. will pay a dividend of $2.83 per share. If the company is growing at a rate of 2.86% per year, and your required rate of return is 13.84%, what is Gold's company stock worth to you?

Oct 3rd, 2015

Thank you for the opportunity to help you with your question!

assume the price is p, then we have 

(1.0286P+2.83)/(1.1384) = p

solve p 

p=2.83*1.1384(1.1384-1.0286) = 29.34

Please let me know if you need any clarification. I'm always happy to answer your questions.
Sep 18th, 2015

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