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financial analysts forecast abc incorporated growth for the future to be 12 percent. abc's recent dividend was $1.60. what is the value of abc stock when the required return is 15 percent? multiple choice $59.73 $63.72 $79.81 $91.02

Answer

Based on the information provided, the value of ABC stock at a required return rate of 15 percent is calculated to be $59.73 using the dividend discount model. This mathematical approach aims to determine a stock's fair value by considering its future dividend payments and expected market returns, regardless of current market conditions. If the value obtained using the DDM is higher than the current stock price, it is advisable to purchase the stock since it is deemed to be undervalued, and vice versa. The required rate of return (RRR) is the minimum return that investors expect for taking on the stock-holding risk. It is widely used in corporate finance to evaluate the profitability of new investment projects. Dividends are regular payments made by corporations to their investors, as a way of distributing earnings to them. A growth rate is the rate at which dividends are expected to grow in the future. Learn more about Growth rates on brainly.com/question/14263843 #SPJ4.