Problem:
Woidtke Manufacturing's stock currently sells for $23 a share. The stock just paid a dividend of $3.00 a share (i.e., D0 = $3.00), and the dividend is expected to grow forever at a constant rate of 8% a year. What stock price is expected 1 year from now? Round your answer to the nearest cent.
Required:
Question: What is the estimated required rate of return on Woidtke's stock?
Note: Show all workings.