单选题 An analyst gathered the following information about a common stock:
Annual dividend per share $2.10
Risk free rate 7%
Risk premium for this stock 4%
If the annual dividend is expected to remain at $2.10, the value of the stock is closest to:
A. $19.09. B. $30.00. C. $52.50.

【正确答案】 A

【答案解析】P=D/(k-g), but here g=0.
k=risk free rate +equity risk premium, so k=7%+4%=11%
P=$2.10/0.11=$19.09
Note D over (k-g) when g=0 is the same as the preferred stock valuation model.