Respuesta :
The implied stock is $13.25.
Given stock trading at $15.00, paid $0.25, expected growth is 6% and discount rate is 8%
Implied stock is to be computed.
Investors use the value per share of common equity to evaluate a company's success. On earnings statements, companies must provide this amount, known as earnings per share (EPS). This statistic is also used by investors to compute dividends paid to shareholders.
The implied value per share is determined by the number of outstanding shares as well as the amount of net earnings available to shareholders.
The formula to compute the implied stock is given below:
Implied stock = Paid amount × (1+ expected growth percentage)/(discount rate -expected growth percentage)
Implied stock =$0.25 ×(1 + 6%) / (8% - 6%)
= $13.25
Therefore, the implied stock is $13.25.
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