Bergman Corp. has paid an annual dividend of $2.00 per share over the past seven years, including the last payment this month. Investors

Bergman Corp. has paid an annual dividend of $2.00 per share over the past seven years, including the last payment this month. Investors

Bergman Corp. has paid an annual dividend of $2.00 per share over the past seven years, including the last payment this month. Investors expect a brighter future for Bergman and now expect Bergman’s dividend payout to be $2.10 for the end of the year and for the foreseeable future. If the opportunity cost of capital is 12%, what is the intrinsic value of Bergman Corp.’s common stock? What happens to the intrinsic price of the stock if the market interest rate falls? Explain.

Answer preview for Bergman Corp. has paid an annual dividend of $2.00 per share over the past seven years, including the last payment this month. Investors

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