Constant growth valuation

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CONSTANT GROWTH VALUATION Holtzman Clothiers's stock currently sells for $40 a share. It just paid a dividend of $2.75 a share (i.e., D0 = $2.75). The dividend is expected to grow at a constant rate of 4% a year.

A. What stock price is expected 1 year from now? Round your answer to two decimal places.

$______

B. What is the required rate of return? Round your answer to two decimal places. Do not round your intermediate calculations.

%______

Reference no: EM132010282

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