Use the Dividend Growth Model to compute the expected price of a stock in 4 years. Each share is expected to pay a dividend of $9.85 in one year. Investors' annual required rate of return is 10.1%, and the expected growth rate of the dividend is 5.1% per annum. Answer to the nearest penny.

Use the Dividend Growth Model to compute the expected price of a stock in 4 years. Each share is expected to pay a dividend of $9.85 in one year. Investors' annual required rate of return is 10.1%, and the expected growth rate of the dividend is 5.1% per annum. Answer to the nearest penny.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 2P

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Question

Vijay

Use the Dividend Growth Model to compute the expected price of a stock in 4 years. Each
share is expected to pay a dividend of $9.85 in one year. Investors' annual required rate of
return is 10.1%, and the expected growth rate of the dividend is 5.1% per annum. Answer
to the nearest penny.

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