Woidtke Manufacturing's stock currently sells for $20 a share. The stock just paid a dividend of $1.00 a share (i.e, D0 = $1.00). The dividend is expected to grow at a constant rate of 10% a year. What stock price is expected 1 year from now? What is the required rate of return on the company's stock?
The solution comprises of 5 lines of calculations to find the required rate of return.