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Calculate stock price of corporation

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Reference no: EM1360181

Philadelphia Corporation's stock recently paid a dividend of $2.00 per share (D0 = $2), and the stock is in equilibrium. The company has a constant growth rate of 5 percent and a beta equal to 1.5. The required rate of return on the market is 15 percent, and the risk-free rate is 7 percent. What is the stock price of Philadelphia Corporation?

A. $21
B. $14.28
C. $15
D. $11.05

 

Reference no: EM1360181

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