What is expected stock price in seven years

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Reference no: EM131989692

1) ABC’s next dividend is expected to be $5.43, its required return is 22%, its growth rate is 6%. What is ABC's expected stock price in 7 years?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

2) ABC Company's last dividend was $4.2. The dividend growth rate is expected to be constant at 7% for 4 years, after which dividends are expected to grow at a rate of 4% forever. The firm's required return (rs) is 15%. What is its current stock price (i.e. solve for Po)?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

Reference no: EM131989692

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