Question:Problem 9-11 Valuation of a constant growth stockA stock is expected to pay a dividend of $1.75 the end of the ...
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Question:
Problem 9-11
Valuation of a constant growth stock
A stock is expected to pay a dividend of $1.75 the end of the year (that is, D1 = $1.75), and it should continue to grow at a constant rate of 5% a year. If its required return is 14%, what is the stock's expected price 2 years from today? Round your answer to two decimal places.
$