Stock analysts just predicted that hybrid engine companys

Reference no: EM13484294 , Length: 5

Stock analysts just predicted that Hybrid Engine Company's earnings and dividends will grow at 20% each year for the next two years due to its new invention. After that, its growth rate will stabilize at 5% per year indefinitely. Assume that the rate of return on the stock is 14% and its last dividend was $1 per share. Determine the current price of the company's stock.

a. $16.8

b. $15.1

c. $16.1

d. $13.8

Reference no: EM13484294

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