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Ackert Company Estimate of Current Stock Price

The Ackert Company's last dividend was $1.55. The dividend growth rate is expected to be constant at 1.5% for 2 years, after which dividends are expected to grow at a rate of 8.0% forever. The firm's required return (rs) is 12.0%. What is the best estimate of the current stock price?

a. $37.05
b. $38.16
c. $39.30
d. $40.48
e. $41.70

Solution Summary

The solution contains simply the concise calculations necessary to reach an answer.

$2.19