Purchase Solution

Harrison Clothiers: Constant Growth Valuation, Expected Stock Price, and Required ROR

Not what you're looking for?

Ask Custom Question

Harrison Clothiers' stock currently sells for $20 a share. It just paid a dividend of $1 a share (D= 1.00) The dividend is expected to grow at a constant rate of 6% a year. What stock price is expected 1 year from now? What is the required rate of return?

Purchase this Solution
Solution Summary

The solution explains the calculation of expected stock price and the rate of return.

Solution Preview

Using the constant growth formula
Required return = D1/MP + g
Total return = Dividend ...

Purchase this Solution
Free BrainMass Quizzes
Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Basics of corporate finance

These questions will test you on your knowledge of finance.

Motivation

This tests some key elements of major motivation theories.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

View More Free Quizzes
Related BrainMass Solutions

  • The Constant Dividend Growth Model

    296355 Harrison Cothiers Stock Constant growth valuation: expected stock price, ROR Harrison Cothiers' stock currently sells for $20 a share. It just paid a dividend of $1.00 a share (that is , D 0 = $1.00).

  • Constant Growth Valuation for Harrison Clothiers

    252339 Constant Growth Valuation for Harrison Clothiers Harrison Clothiers stock currently sells for $20.00 a share. It just paid a dividend of $1.00 a share (that is, D =$1.00.

  • required rate of return; price of stock

    194467 Constant Growth Stock: Harrison Clothiers required rate of return; price of stock Harrison Clothiers stock currently sells for $20 a share. It just paid a dividend of $1.00 a share.

  • DPS, Constant Growth, Corporate & Rate of Return - Valuation

    CONSTANT GROWTH VALUATION Harrison Clothiers' stock currently sells for $20.00 a share. It just paid a dividend of $1.00 a share (that is D0= $1.00). The dividend is expected to grow at a constant rate of 6% a year.

  • Required Rate of return / Expected stock price

    219778 Harrison Clothiers: Required Rate of return, expect price of stock 4 years from today 1. Harrison Clothiers' stock currently sells for $20 a share. It just paid a dividend of $1.00 a share (that is D0 = $1.00).

  • Finance questions

    9-3 CONSTANT GROWTH VALUATION Harrison Clothiers' stock currently sells for $20.00 a share. It just paid a dividend of $1.00 a share (that is, D0 = $1.00). The dividend is expected to grow at a constant rate of 6% a year.

  • Harrison: Stock valuation using constant dividend growth

    193607 Value of Harrison Clothiers stock considering constant dividend growth Harrison Clothiers stock currently sells for $20 a share. The stock just paid a dividend of $1.00 a share.

  • Lashgari Company: A stock just paid a dividend of $1

    If its required return is 12 percent, what is the stock's expected price 4 years from today? 6. A stock just paid a dividend of $1. The required rate of return is rs = 11%, and the constant growth rate is 5%.

  • Merger Valuation of Stock & Beta

    Van Buren's dividend is expected to grow at a constant rate of 5% a year, and its beta is 0.9. The risk-free rate is 5.6% and the market risk premium is 6%. What is the current price of Van Buren's stock?

View More Related Solutions