Berberich corporation net income this year is 800000 the, Ask an Expert

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Berberich Corporation net income this year is $800,000. The company generally retains 35% of net income for reinvestment. The company's common equity currently has a book value of $5,000,000. They just paid a dividend of $1.37, and the required rate of return on this stock is 12%.

Required:

Compute the value of this stock if dividends are expected to continue growing indefinitely at the company's sustainable growth rate.

a) $22.61

b) $11.62

c) $4.35

d) $15.63

Note: Show all workings.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91147824

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