Bui corp. pays a constant $12 dividend on its stock. the company will maintain this dividend for the next nine years and will then cease paying dividends forever. required: if the required return on this stock is 10 percent, what is the current share price?

share price 69.108

Explanation:

We have to calculate the present value of the dividends like it was an annuity using the required return.

PV 69.108

the gordon dividend growth model doesn't apply becasue the dividend will cease to exist, there is no infinite future dividend to calculate the present value using that method.

a corporation is legally separate from its owner, and it pays its own taxes.