Burkhardt Corp. pays a constant $14.40 dividend on its stock. The company will maintain this dividend for the next 6 years and will then cease paying dividends forever. If the required return on this stock is 12 percent, what is the current share price

Current Price of Stock $59.20

Explanation:

The computation of the current market price is shown below:

Particulars            Time   PVF at 12%          Amount ( in $)     PV  ( in $)

Dividend                1                 0.8929                14.40                 12.86

Dividend                2                0.7972                 14.40                 11.48

Dividend                3                 0.7118                  14.40                10.25

Dividend                4                 0.6355                 14.40                9.15

Dividend                5                 0.5674                 14.40                8.17

Dividend                6               0.5066                  14.40                 7.30

Current Price of Stock                                                                  $59.20

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