Healthy Supplies, an investor-owned healthcare supply chain, just paid a dividend (D0) of $4.57 per share. The current price of the stock (P0) is $43 per share. The firm’s required rate of return is 12%.
What is the stock’s constant growth rate?
How does the expected growth rate change if the required rate of return drops to 9%?
Using the expected growth rate calculated in a, what is the company’s stock price in 10 years?