Final answer:
The value of the stock, with a dividend of $4.35 expected to grow at 4.65% indefinitely and an 11.40% required return, is calculated using the Gordon Growth Model to be $64.44.
Step-by-step explanation:
To find the value of the stock when a firm just paid a dividend of $4.35 that is expected to grow at a constant rate of 4.65% forever with the required rate of return being 11.40%, we use the Gordon Growth Model (also known as the Dividend Discount Model). This model states that the value of a stock is the present value of all future dividends it is expected to provide over time. In the formula, P = D / (k - g), where P is the price of the stock, D is the dividend just paid, k is the required rate of return, and g is the growth rate of the dividend.
The calculation is as follows:
P = $4.35 / (0.114 - 0.0465) = $4.35 / 0.0675 = $64.44
Therefore, the value of the stock is $64.44.