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Anticipated Rate of Return

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A firm's stock presently sells for $71 per share. The stock just paid a dividend of $2.12. The dividend is anticipated to increase at a constant rate of 5.5% a year. What stock price is anticipated one year from now?

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P0=71
D0=2.12
g=5.5%
By Discounted Dividend Model, the firm's cost of capital K is:
K = D1/P0 + g
also
K ...

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