It is the cost at which a share of stock or other security last traded. The present price serves as the starting point in an open market. It shows the price that a buyer and seller would be prepared to accept for a subsequent transaction involving that security.
The idea behind current value accounting is that assets and obligations should be valued at what they may be sold for or settled as of the current date.
The stock of the corporation is currently trading at $51.20.
The constant dividend growth model is the formula that can be used to calculate the stock price.
Cost = d1 / (r - g)
The formula for determining the next dividend to be paid is: d1 = current dividend paid x (1 + growth rate) = $3.20 x (1.04) = $3.328
R is the equity cost.
g = rate of growth
Price = $3.328 / (10.5 - 4)
$3.328 / 0.065 = $51.20
The current price is $51.20
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