The required return equal to the expected return

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Reference no: EM131014095

Woidtke Manufacturing’s stock currently sells for $22 a share. The stock just paid a dividend of $1.20 a share (i.e., ), and the dividend is expected to grow forever at a constant rate of 10% a year. What stock price is expected 1 year from now? What is the estimated required rate of return on Woidtke’s stock (assume the market is in equilibrium with the required return equal to the expected return)?

Reference no: EM131014095

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