The annual dividend rate of this newly issued stock is 15% (150/1000). Since the market rate is only 12% your stock is valued:

1,000 (15/12) = 1,000 * 1.25 = 1,250, or

150/.12 = 1,250

Situation: Richard Tailor is interested in finding the value of a corporate common stock that he recently purchased. The newly issued common share displays 1,000 / share (P = 1,000) and pays dividend 150 annually for 30 years. Another common share of similar risk has a 12% required annual rate of return or discounted rate. What is common stock value (VS)?