You observe a reit which currently pays a dividend per share of $3.00. you expect dividends to grow 3.5% and believe the required return for this stock should be 8.75%. using the gordon growth model, what should be the price per share?

Current dividend paid (Do) = $3.00

Growth rate (g) = 3.5% = 0.035

Required rate of return (Ke) = 8.75% = 0.0875

Crrent market price (Po) = ?

Po = Do(1 + g)

            ke -g

Po = $3.00(1 + 0.035)

                 0.0875 - 0.035

Po = $3.00(1.035)

                 0.0525

Po = $59.14

Explanation:

The current market price of the stock equals current dividend paid subject to growth rate divided by the excess of required return over the growth rate.

rational decision making is a multi-step process for making choices between alternatives. the process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. the word “rational” in this context does not mean sane or clear-headed as it does in the colloquial sense.

hope this

the answer is: guns or butter

hope i

-lavira : )