What is the current stock price and intrinsic value of stock

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Reference no: EM13956249

Pro Build Inc. has had a net income of $2 million in its most recent year. Net income is expected to grow by 3% per year. The firm always pays out 30% of net income as dividends and has 500,000 shares of common stock outstanding. The current cost of equity is 12%.

1. What is the current stock price?

ABC Corp. has just paid an annual dividend of $0.27. ABC has a required return of 12%.

1. If dividends are expected to be constant, what is the intrinsic value (fair price) of ABC stock?

Reference no: EM13956249

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