Explain the required rate of return


Harrison Clothiers' stock currently sells for $35 a share. It just paid a dividend of $3 a share (that is, D0 = 3). The dividend is expected to grow at a constant rate of 10% a year.

a. What stock price is expected 1 year from now? Round your answer to two decimal places.

b. What is the required rate of return? Round your answers to two decimal places.

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Finance Basics: Explain the required rate of return
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