Final answer:
The current value of Golden Corp.'s stock after the dividend payment is calculated using the Gordon Growth Model, resulting in a present value of $45.78.
Step-by-step explanation:
The student's question relates to the calculation of the present value of a stock given a constant growth dividend model. Golden Corp. has just paid a dividend ($D_0) of $4, and the dividends are expected to grow at a rate (g) of 3% per year indefinitely. The required rate of return (r) is 12%. To find the present value of the stock, you would use the Gordon Growth Model also known as the Dividend Discount Model which is expressed as:
\[P = \frac{D_1}{r - g}\]
Where \(D_1\) is the expected dividend next year, \(r\) is the required rate of return, and \(g\) is the growth rate. As \(D_1 = D_0 \times (1 + g)\), we can calculate this as:
\[D_1 = $4 \times (1 + 0.03) = $4.12\]
Substituting the values into the model, we get:
\[P = \frac{$4.12}{0.12 - 0.03} = \frac{$4.12}{0.09}\]
\[P = $45.78\]
Therefore, the current value of the stock immediately after the dividend payment is $45.78.