Sandhill Corp. has been selling electrical supplies for the past 20 years. The company’s product line has changed very little in the past five years, and the company’s management does not expect to add any new items for the foreseeable future. Last year, the company paid a dividend of $4.95 to its common stockholders. The company is not expected to increase its dividends for the next several years. If your required rate of return for such firms is 15 percent, what is the current value of this company’s stock?

Respuesta :

Answer:

$ 5.6925

Explanation:

Rate of return= (Current value- original value)/ Original value × 100

15= (Current value- 4.95)/4.95 × 100

Current value=  $ 5.6925