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What price do you forecast for the stock next year

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Question - Horse and Buggy Inc. is in a declining industry. Sales, earnings, and dividends are all shrinking at a rate of 10% per year.

a. If r= 15% and DIV1 = $4, what is the value of a share?

b. If r= 15% and DIV1 = $4, what price do you forecast for the stock next year?

c. If r= 15% and DIV1 = $4, what rate of return should you expect if you buy the stock today and sell it in one year?

Reference no: EM133180139

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