Final answer:
The price per share of Coca-Cola stock, calculated using the Dividend Discount Model with a dividend of $1.65, a growth rate of 3%, and a required rate of return of 6%, is $55.00.
Step-by-step explanation:
To calculate the price per share of Coca-Cola's stock using the given dividend information, you can use the Gordon Growth Model, also known as the Dividend Discount Model (DDM). The formula is Price = Dividend per share / (Required rate of return - Growth rate). In this case:
- Dividend per share (D) = $1.65
- Required rate of return (r) = 6% or 0.06
- Growth rate (g) = 3% or 0.03
Plugging the values into the formula gives:
Price = $1.65 / (0.06 - 0.03) = $1.65 / 0.03 = $55.00 per share.
Therefore, the price per share of Coca-Cola stock is $55.00. To calculate the price per share for Coca-Cola's stock, we can use the dividend discount model (DDM). The formula for DDM is:
Price per Share = Dividend / (Required Rate of Return - Growth Rate)
Using the given information, the dividend is $1.65 per share, the required rate of return is 6%, and the growth rate is 3%. Plugging these values into the formula:
Price per Share = $1.65 / (0.06 - 0.03) = $55
Therefore, the price per share for Coca-Cola's stock is $55.