What is the expected stock price one year from today


Consider the same firm in Question 1: Its earnings per share were $3.00 during the current year (period 0). The firm reinvests 50% of earnings as capital investments, to maintain annual earnings growth of 4% forever. The appropriate discount rate is 15% per year. What is the expected stock price one year from today, i.e., P1?

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Finance Basics: What is the expected stock price one year from today
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