What is the best estimate of stock current market value

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Reference no: EM132005871

1. Burke Tires just paid a dividend of D0 = $1.45. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this low-risk stock is 9.00%. What is the best estimate of the stock's current market value?

$40.78 $42.65 $43.75 $49.29 $45.99

2. A stock JUST PAID a dividend of $0.90. The required rate of return is rs = 10.5%, and the expected constant growth rate is g = 7.0%. What is the stock's current price?

$21.30 $20.02 $26.74 $18.14 $43.20

Reference no: EM132005871

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