Expected price=Current price*(1+Growth Rate)
=35*1.06
=$37.1
Required return=(D1/Current price)+Growth rate
=(2.5/35)+0.06
=13.14%(Approx).
Holtzman Clothiers's stock currently sells for $35.00 a share. It just paid a dividend of $2.50 a share (i.e., Do = $2....
q 14
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Holtzman Clothiers's stock currently sells for $31.00 a share. It just paid a dividend of $2.25 a share (i.e., D0 = $2.25). The dividend is expected to grow at a constant rate of 10% a year. What stock price is expected 1 year from now? Round your answer to the nearest cent. What is the required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
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