What is the current price of the stock?

Mathematics
Tutor: None Selected Time limit: 1 Day

 Boomer products, Inc. Manufactures "no- inhale cigarettes. As their target customers age and pass on, sales of the product are expected to decline. Thus, demographics suggest that earnings and dividends will decline at a rate of 5% annually forever. The firm just paid a dividend of $4; given required return is 10%, what is the current price of the stock.

Nov 18th, 2015

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current price of the stock = 4*(1-5%)/(10%+5%)= 25.33

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Nov 18th, 2015

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