Question

7. Current stock price of company X is equal to the price implied by both the dividend discount model and the P/E multiple. If P/E stands at 10, earnings per share is $1, discount rate is 16% and the company X just paid a $0.5 dividend per share, what is the dividend next period? A. $0.55 B. $0.50 C. $0.71 D. $0.57

Name: 7 current stock price of company x is equal to the price implied by both the dividend discount model and the pe multiple if pe stands at 10 earnings per share is 1 discount rate is 16 and th 80785
Uploaded: 2023-12-06T21:29:08-08:00
Duration: 2 min 11 s
Channel: Matthew Wagner
Description: 7 current stock price of company x is equal to the price implied by both the dividend discount model and the pe multiple if pe stands at 10 earnings per share is 1 discount rate is 16 and th 80785

          7. Current stock price of company X is equal to the price implied by both the dividend discount model and the P/E multiple. If P/E stands at 10, earnings per share is $1, discount rate is 16% and the company X just paid a $0.5 dividend per share, what is the dividend next period? A. $0.55 B. $0.50 C. $0.71 D. $0.57

Added by Robert D.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Matthew Wagner

12/06/2023

Step 1

The P/E ratio is given as 10, and the earnings per share (EPS) is $1. Implied stock price = P/E ratio × EPS = 10 × $1 = $10. Show more…

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7. Current stock price of company X is equal to the price implied by both the dividend discount model and the P/E multiple. If P/E stands at 10, earnings per share is $1, discount rate is 16% and the company X just paid a $0.5 dividend per share, what is the dividend next period? A. $0.55 B. $0.50 C. $0.71 D. $0.57