Computing the expected stock price


Waldo Company's current stock price is $36, and its last dividend was $2.40. IN view of Waldo'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 of g in the future, and if rs is expected to remain at 12%, then what is Waldo's expected stock price 5 years from now?

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Finance Basics: Computing the expected stock price
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