Problem:
Whited Inc.'s stock currently sells for $35.25 per share. The dividend is projected to increase at a constant rate of 4.75% per year. The required rate of return on the stock, rs, is 11.50%.
Required:
Question: What is the stock's expected price 5 years from now?
a. $44.46
b. $40.17
c. $42.26
d. $41.20
e. $43.34
Note: Provide support for rationale.