Question

A stock is expected to pay a dividend of $2.50 at the end of the year (i.e., D1 = $2.50), and it should continue to grow at a constant rate of 4% a year. If its required return is 13%, what is the stock's expected price 2 years from today? Do not round intermediate calculations. Round your answer to the nearest cent.

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Tresnan Brothers is expected to pay a $2.00 per share dividend at the end of the year (i.e., D1 = $2.00). The dividend is expected to grow at a constant rate of 9% a year. The required rate of return on the stock, rs, is 18%. What is the stock's current value per share? Round your answer to the nearest cent.

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Answer 1

Price in 2 years = D3/(ke-g) $28.89 (2.5*1.04)/(0.13-0.04)