Calculate the value of common stock given: Expected Dividend Year 1 (D1) is $20; Capitalization Rate (K) is 5%; and Growth Rate (g) is 2%

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter7: Valuation Of Stocks And Corporations
Section7.4: Valuing Common Stocks
Problem 3ST
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Calculate the value of common stock given: Expected Dividend Year 1 (D1) is $20; Capitalization Rate (K) is 5%; and Growth Rate (g) is 2%.

666.67 or 966.67?

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