Stock QWE plans to pay dividends of $3.00, $3.50, and $4.00 in each of the next three years. If the price of this stock will be $50.00 at the end of three years and the required rate of return by shareholders is 15%, then what is the value of the stock today

$40.76

Explanation:

Calculation of the value of the stock today

First step is find the value of stock for each year.

The Value of stock today will be:

First year =($3.00 / 1.15^¹)

First year=($3.00/1.15)

First year=$2.61

Second year= ($3.50 / 1.15^²)

Second year =($3.50/1.3225)

Second year =$2.65

Third year= ($4.00 / 1.15^3)

Third year=($4.00/1.520875)

Third year =$2.63

End of third year= ($50.00 / 1.15^3)

End of third year = ($50.00/1.520875)

End of third year =$32.88

Last step is to add the amount for each year up

V0= $2.61 + $2.65 + $2.63 + $32.88

V0= $40.76

Therefore the value of the stock today will be $40.76

forbearance of student loan payments. under forbearance, your loan payments are postponed (or reduced) but interest continues to accrue during the period of forbearance. if you don't pay the interest during that period, the interest may be “capitalized,” which means it is added to your principal balance.