Great lakes steel supply is losing significant market share and thus its managers have decided to decrease the firm's annual dividend. the last annual dividend was $130 per share but all future dividends will be decreased by 275 percent annual what is a share of this stock worth today at a required return of 155 percent? a. $609 b. $6.93 c. $6.50 d. $6.68 e. $6.98

There's an error in the numbers for this question; I found the correct one and pasted it below;

"Great Lakes Steel Supply is losing significant market share and thus its managers have decided to decrease the firm's annual dividend. The last annual dividend was $1.30 per share but all future dividends will be decreased by 2.75 percent annually. What is a share of this stock worth today at a required return of 15.5 percent? "

Explanation:

Use dividend discount model (DDM) to calculate the stock price

whereby,

P0 = Current price

D0 = Last dividend paid = 130

g = growth rate = -275% or -2.75 as a decimal

r = required return = 155% or 1.55 as a decimal

Next, plug in the numbers to the DDM formula above;

Therefore this stock is worth $6.93