The dividend is expected to grow at a constant rate of 5 a


CONSTANT GROWTH VALUATION Holtzman Clothiers’s stock currently sells for $38.00 a share. It just paid a dividend of $2.00 a share (i.e., D0 $2 00). The dividend is expected to grow at a constant rate of 5% a year. What stock price is expected 1 year from now? What is the required rate of return?

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Financial Management: The dividend is expected to grow at a constant rate of 5 a
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