Pharmecology is about to pay a dividend of 165 per share


Pharmecology is about to pay a dividend of $1.65 per share. It’s a mature company, but future EPS and dividends are expected to grow with inflation, which is forecasted at 4.25% per year. The nominal cost of capital is 11.00%.

a. What is Pharmecology’s current stock price?

b. What would be Pharmecology’s current stock price using forecasted real dividends and a real discount rate?

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Financial Management: Pharmecology is about to pay a dividend of 165 per share
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