Fletcher’s Company’s current stock price is $36, and its last dividend was $2.40.  In view of Fletcher’s strong financial position and its consequent low risk, its required rate of return is only 12%.  If dividends are expected to grow at a constant rate, g, in the future, and if ksis expected to remain at 12%, what is Fletcher’s expected stock price 5 years from now?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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  1. Fletcher’s Company’s current stock price is $36, and its last dividend was $2.40.  In view of Fletcher’s strong financial position and its consequent low risk, its required rate of return is only 12%.  If dividends are expected to grow at a constant rate, g, in the future, and if ksis expected to remain at 12%, what is Fletcher’s expected stock price 5 years from now?  
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