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What is the price of Daryl Corp stock expected to be in 1 year if it...

What is the price of Daryl Corp stock expected to be in 1 year if it has an expected return of 5.4 percent, is expected to pay a dividend of $5.50 in 1 year and a dividend of $1.20 in 2 years, and is expected to be priced at $24.00 in 2 years and $36.00 in 3 years?

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Answer #1

Stock price 1 year: = (Dividend in Year 2 + Price in Year 2)/(1+Expected return) = ($1.20+$24)/(1+5.4%) = $23.91 Hence, Stock

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