Gilmore, Inc., just paid a dividend of $2.35 per share on its stock. The dividends are expected to grow at a constant rate of 4.1 percent per year, indefinitely. If investors require a return of 10.4 percent on this stock, what is the current price

$38.89

Step-by-step explanation:

Given that:

Gilmore, Inc., just paid a dividend ( D₀) of $2.35 per share on its stock

The dividends are expected to grow at a constant rate (r) of 4.1 percent per year = 0.041

SO; if Gilmore, Inc., is requesting for a return of 10.4 percent on this stock; the current price is calculated as follows:

P₀= D₁ / (r - g)

P₀ = D₀×(1+g) / (r-g)

P₀ = $2.35 × (1+0.041) / (0.104 - 0.041)

P₀ = $2.45 / 0.063

P₀ = $38.89

Thus, the current price = $38.89

yes   because as the functions are graphed they eventually will intersect unless otherwise

step-by-step explanation: