Kinard's kennels inc. roe is 20%. their dividend payout ratio is 70%. the last dividend, just paid, was $2.00. if dividends are expected to grow by the company's internal growth rate indefinitely, what is the current value of kinard's common stock if its required return is 18%? select one: a. $11.52 b. $16.89 c. $17.67 d. $14.92

option C

Step-by-step explanation:

given,

ROE = 20 %

dividend payout ratio = 70%

paid = $ 2.00

value of current stock if required return is 18% = ?

g = (1 - payout ) x  ROE

  = (1 - 0.7 ) x 20%

  = 6 %

dividend =  2 (1 + growth rate)

               = 2 x (1 + 0.06) =$ 2.12

as current value of stock

        =

        =

        = $17.67

hence, the correct answer is option C

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step-by-step explanation:

step-by-step explanation: