Answer:
The current stock value of PLC: $54.55.
Explanation:
Please find the below for detailed explanations and calculations:
PLC's stock value should equal to the present value of its future dividends discounted at required rate of return which is given in the question at 11%.
The constant stream of PLC's annual dividend as described in the question forms a perpetuity of $6.00 dollar per year perpetually.
As explained above, by applying the formula for calculating the present value of the perpetuity, we have:
PLC's current stock value = 6/11% = $54.54.
