What will the share price be

Reference no: EM13290950

a. Consider a stock with a required return of 5 percent and a most recent dividend of $3.00. It is a growth stock and its dividend will increase by 10% next year and then maintain a constant growth rate thereafter. What is the expected share price now?

b. What will the share price be, if the stock, after increasing the dividend by 10% next year, then reduces the growth rate to 5% after that?

Reference no: EM13290950

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