Estimated required rate of return on woidtke stock


Problem:

Woidtke Manufacturing's stock currently sells for $23 a share. The stock just paid a dividend of $3.00 a share (i.e., D0 = $3.00), and the dividend is expected to grow forever at a constant rate of 8% a year. What stock price is expected 1 year from now? Round your answer to the nearest cent.

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Question: What is the estimated required rate of return on Woidtke's stock?

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Finance Basics: Estimated required rate of return on woidtke stock
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