What is the expected price of the stock two years from now

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Future price of a constant growth stock

Problem 1: Leonard Co.'s stock price is $55 per share, and its expected year-end dividend is $2.75 a share (D = $2.75). The stock's required return is 12.00%, and the dividend is expected to grow at a constant rate forever. What is the expected price of the stock 2 years from now?

a. $58.30

b. $58.85

c. $60.64

d. $61.80

e. $62.97

Reference no: EM132970421

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