Growth valuation-what is the required rate of return

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Reference no: EM131980673

CONSTANT GROWTH VALUATION

Holtzman Clothiers's stock currently sells for $38 a share. It just paid a dividend of $3.5 a share (i.e., D0 = $3.5). The dividend is expected to grow at a constant rate of 9% a year.

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

Please state the formulas clearly to help me understand.

$______

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

_______ %

Reference no: EM131980673

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