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14 June, 03:52

Gontier corporation stock currently sells for $64.18 per share. the market requires a return of 12 percent on the firm's stock. required: if the company maintains a constant 5.75 percent growth rate in dividends, what was the most recent dividend per share paid on the stock?

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  1. 14 June, 05:09
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    As per Dividend distribution model,

    Re = D1/p0 + g

    0.12 = D1/64.18 + 0.0575

    0.0625 = D1/64.18

    D1 = 4.01125

    D0 = 4.01124/1.0575 = 3.793

    Most recent dividend per share paid on the stock = $ 3.793
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