A Stock Currently Sells for $28 a Share

question 77

Multiple Choice

A stock currently sells for $28 a share. Its dividend is growing at a constant rate, and its dividend yield is 5 percent. The required rate of return on the company's stock is expected to remain constant at 13 percent. What is the expected stock price, seven years from now?

• A) $24.62
• B) $29.99
• C) $39.40
• D) $41.83
• E) $47.98

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