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GYW Inc.'s stock currently sells for $40.25 per share. The dividend is projected to increase at...

GYW Inc.'s stock currently sells for $40.25 per share. The dividend is projected to increase at a constant rate of 6.25% per year. The required rate of return on the stock, rs, is 9.50%. What is the stock's expected price 5 years from now?

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Answer #1

P5=Current price*(1+Growth Rate)^5

=$40.25*(1.0625)^5

=$40.25*1.354081154

which is equal to

=$54.50(Approx).

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