If highlines equity cost of capital is 94 per year and its


Assume Highline Company has just paid an annual dividend of $1.07. Analysts are predicting an 11.2% per year growth rate in earnings over the next five years. After then, Highline's earnings are expected to grow at the current industry average of 4.7% per year. If Highline's equity cost of capital is 9.4% per year and its dividend payout ratio remains constant, for what price does the dividend-discount model predict Highline stock should sell?

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Financial Management: If highlines equity cost of capital is 94 per year and its
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