What would be the most economically rational value of stock


Question: Assume IBM is expected to pay a total cash dividend of $3.4 next year and dividends are expected to grow indefinitely by 3.3 percent a year. Assume the required rate of return (i.e. equity holder's opportunity cost of capital) is 8.6 percent. Assuming this is the best information available regarding the future of this firm, what would be the most economically rational value of the stock today (i.e. today's "price")? Answer to 2 decimal places.

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Accounting Basics: What would be the most economically rational value of stock
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