Homework Answers
rate positively ..
| price today | Dividend in year 1/(required rate - Growth rate) | ||||
| Dividend in year 1 = | 28.2*(9.2%-6.1%) | ||||
| 0.8742 | |||||
| Stock price 5 year from now = Expected dividend in year 6/(required rate - growth rate) | |||||
| Stock price in 5 year = | 0.8742*(1+6.1%)^5/(9.2%-6.1%) | ||||
| 37.92 | |||||
| answer = | 37.92 | ||||
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