The dividend is expected to grow at constant rate

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1. Holtzman Clothiers's stock currently sells for $23 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 7% a year. What stock price is expected 1 year from now? Round your answer to two decimal places.

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

3. Farley Inc. has perpetual preferred stock outstanding that sells for $36.00 a share and pays a dividend of $3.00 at the end of each year. What is the required rate of return? Round your answer to two decimal places.

Reference no: EM131909328

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