Answer:
The current stock price is $15.44.
Explanation:
The dividend is $1.50.
The required rate of return is given as 14.1%.
The constant growth rate is 4%.
The current stock price
=[tex]\frac{dividend\ \times\ (1+\ constant\ growth\ rate)}{required\ rate\ of\ return\ -\ constant\ growth\ rate}[/tex]
=[tex]\frac{1.50\ \times\ (1\ +\ 0.04)}{0.141\ -\ 0.04}[/tex]
=[tex]\frac{1.56}{0.101}[/tex]
=$15.44
