Valuing Common Stocks with the Dividend Growth Model
Constant Growth Valuation
Woidtke Manufacturing's stock currently sells for $21 a share. The stock just paid a dividend of $2.25 a share (i.e., D0 = $2.25), and the dividend is expected to grow forever at a constant rate of 5% a year. What stock price is expected 1 year from now? Round your answer to the nearest cent. $
What is the estimated required rate of return on Woidtke's stock? Round the answer to three decimal places. %