Your company pays a dividend of $2.35 per share and expects no growth in this dividend at all, it will remain at this level indefinitely in management’s opinion. Theoretically what will this stock’s price be today if investors require an 8% rate of return on all such investments?

a. $27.43
b. $29.38
c. $30.75
d. $32.58

To calculate the stock price of a company that pays a dividend with no expected growth, you can use the formula for the present value of a perpetuity. The present value of perpetuity formula is:

\[P = \frac{D} {r}\]

Where:
P = Stock price
D = Dividend per share
r = Required rate of return

In this case, the dividend per share is $2.35, and the required rate of return is 8%. Plugging these values into the formula:

\[P = \frac{2.35}{0.08}\]

Simplifying the equation gives you:

\[P = 29.375\]

Since we are looking for the stock price today, we need to round this value to the nearest cent, giving us an answer of:

b. $29.38

Therefore, the theoretical stock price today, based on the given information, would be $29.38.