Final answer:
The value of 'B' represents the present value of the stock calculated using the Dividend Discount Model, which based on the provided information, is $32.61.
Step-by-step explanation:
The formula P0 = D1/(rS - g) given in the question is from the Dividend Discount Model, which is used to calculate the present value of a stock based on its future dividend payments. The value of 'B' is asked for, but based on the details provided, 'B' seems to be denoting the calculated present value of the stock (P0), which is given as $32.61 in the question. To find this present value using the provided formula, we need to use the dividend payment (D1), the required rate of return (rS), and the growth rate (g). In this case, D1 is $0.75, rS is 10.5%, and g is 8.2%. Plugging these values into the equation, we get:
P0 = $0.75 / (10.5% - 8.2%) = $32.61
Since we are asked to identify the value of 'B', and it is given as $32.61, this matches the result of our calculation. Therefore, the value of 'B' is indeed 1) $32.61.