Question
XYZ Co. recently paid a dividend of $2.50. If dividends are expected to grow at a...
XYZ Co. recently paid a dividend of $2.50. If dividends are expected to grow at a constant rate of 4% and the investor's required rate of return is 10%, what should the stock value be six years from now?
Group of answer choices
$54.83
$52.72
not enough information
$53.89
Answers
Stock Value be 6 years from Now =Dividend Year 0*(1+g)^7/(Required Rate-growth) =2.50*(1+4%)^7/(10%-4%) =54.83
(Option a is correct option)
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