Answer:
$18.33
Explanation:
Given that
Expected dividend pay in next year = $2.20
Required rate of return = 12%
The formula and the computation of the value of a stock are shown below:
Value of a stock = Expected dividend pay in next year ÷ required rate of return
= $2.20 ÷ 12%
= $18.33
Simply dividing the Expected dividend pay in next year by the required rate of return to get the value of a stock.
