Explore BrainMass

Explore BrainMass

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

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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?

    © BrainMass Inc. brainmass.com June 3, 2020, 9:40 pm ad1c9bdddf

    Solution Preview

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

    Solution Summary

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