Asked by
Javier Gonzalez
on Dec 09, 2024
Verified
How much are you willing to pay for one share of Delphia stock if the company just paid a $1.34 annual dividend, the dividends increase by 2.8% annually, and you require a 14% rate of return?
A) $9.84
B) $11.96
C) $12.30
D) $12.99
E) $13.61
Annual Dividend
The total amount of dividends that a company pays to its shareholders for each share they own in a given fiscal year.
Rate of Return
The profit or deficit experienced by an investment within a certain timeframe, depicted as a percentage of the investment's original price.
- Ascertain the ongoing worth of equities by assessing variable dividend growth rates and required rates of yield.
- Apply the concept of present value to determine the worth of future dividends.
Verified Answer
KK
Learning Objectives
- Ascertain the ongoing worth of equities by assessing variable dividend growth rates and required rates of yield.
- Apply the concept of present value to determine the worth of future dividends.