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16 June, 08:33

Goode Inc.'s stock has a required rate of return of 11.50%, and it sells for $25.00 per share. Goode's dividend is expected to grow at a constant rate of 7.00%. What was the last dividend, D0?

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  1. 16 June, 12:15
    0
    1.05

    Explanation:

    Price - 25.00

    Required - 11.50%

    Growth Rate - 7%

    To calculatethe last dividend, we will apply the formula below;

    (Price * (Required-Growth Rate)) - Growth Rate

    Substituting the values in the formula, we have;

    (25*.045) -.07 = 1.055

    Hence the last dividend is 1.05
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