Royal Bank common shares pay dividends annually. They just paid a $1.50 dividend. Stock holders require a return of 12%. Royal is expected to continue paying dividends that will grow at 3.5% per annum in perpetuity
What is the fair price of a share of Royal Bank stock?
A) $18.26
B) $12.50
C) $17.65
D) $18.90
E) $16.72
A
Business
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