Constant growth valuation and required rate of return


Question: Harrison Clothiers' stock currently sells for 19.00 dollar per share. It just paid a dividend of $3.25 per share [D0 = 3.25]. The dividend is expected to grow at a constant rate of 10 percent a year.

[A] What stock price is expected 1 year from now? Give your answer to the nearest hundredth.

[B] Determine the required rate of return? Give your answer to the nearest hundredth.

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Finance Basics: Constant growth valuation and required rate of return
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