Problem:
A stock is expected to pay a divident of 0.75% at the end of the year (D1=$0.75) The required rate of return is rs=10.5% and the expected constant growth rate is g=6.4%.
Required:
What is the stock's current price? ( and please explain how you got the answer )
a) 17.39
b)17.84
c)18.29
d. 18.75
e) 19.33
Note: Provide support for your rationale.