Holtzman Clothiers’s stock currently sells for $38.00 a share. It just paid a dividend of $2.00 a share (i.e., Do = $2.00). The dividend is expected to grow at a constant rate of 5% a year. What stock price is expected 1 year from now? What is the required rate of return?
Tag: CONSTANT GROWTH VALUATION
CONSTANT GROWTH VALUATION
Tresnan Brothers is expected to pay a $1.80 per share dividend at the end of the year (i.e., D, = $1.80). The dividend is expected to grow at a constant rate of 4% a year. The required rate of return on the stock, r„ is 10%. What is the stock’s current value per share?