Determining the constant growth valuation

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Question: Constant growth valuation

Holtzman Clothiers' stock currently sells for $27 a share. It just paid a dividend of $3.75 a share (i.e., D0 = $3.75). The dividend is expected to grow at a constant rate of 5% a year.

a. What stock price is expected 1 year from now?

b. What is the required rate of return?

Reference no: EM131961153

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