CONSTANT GROWTH VALUATION Harrison Clothiers' stock currently sells for $20,00 a share. It just paid a dividend of $1.00 a share (that is D_0 = $1.00). The dividend is expected to grow at a constant rate of 6% a year. What stock price is expected 1 year from now? What is the required rate of return?
NONCONSTANT GROWTH VALUATION Hart Enterprises recently paid a dividend, D_0, of $1.25. It expects to have nonconstant growth of 20% for 2 years followed by a constant rate of 5% thereafter. The firm's required return is 10%. a. How far away is the horizon date?