Coolibah Holdings is expected to pay dividends of $1.20 every six months for the next three...

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Coolibah Holdings is expected to pay dividends of $1.20 every six months for the next three...

Coolibah Holdings is expected to pay dividends of $1.20 every six months for the next three years. If the current price of Coolibah stock is $22.10 and Coolibah's equity cost of capital is 14%, what price would you expect Coolibah's stock to sell for at the end of three years?

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Answer 1

Answer #1

Calculating Stock Price in 3 years,

Using TVM Calculation,

FV = [PV = 22.10, PMT = 1.20, N = 6, I = 0.07]

FV = $41.75

Stock Price in 3 years = $41.75

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Answer 2

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