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What price does the dividend-discount model predict

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Question - Assume Highline Company has just paid an annual dividend of $ 0.91. Analysts are predicting an 11.2 % per year growth rate in earnings over the next five years. After then, Highline's earnings are expected to grow at the current industry average of 4.8 % per year. If Highline's equity cost of capital is 9.3 % per year and its dividend payout ratio remains constant, for what price does the dividend-discount model predict Highline stock should sell?

Reference no: EM132161394

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