Answer:
The current price of the stock is $46
Step-by-step explanation:
We will use the gordon growth model to calculate the price of the stock. The formula is
Price= D1/R-G
D1 is the year end dividend
R is the required return on the stock and G is the constant growth rate.
We will plug in the numbers in the formula in order to find the price.
4.60/(0.17-0.07)=46