The stock price is $25.00.
What exactly is stock?
A stock, also known as a share or equity, represents a unit of ownership in a company. When you own a stock, you are entitled to a share of the company's profits and assets, and you have the right to vote at shareholder meetings.
To determine the stock price, we need to use the formula for the present value of a perpetuity:
Stock price = Dividend / (Required rate of return - Growth rate)
In this case, the dividend is $1.00, the required rate of return is 9.0%, and the growth rate is 5.0%. Plugging these values into the formula, we get:
Stock price = $1.00 / (9.0% - 5.0%)
= $1.00 / 4.0%
= $25.00
Therefore, the stock price is $25.00.
To learn more about stocks from the given link:
https://brainly.com/question/25765493
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