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    Constant Growth Valuation for Harrison Clothiers

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    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. The dividend is expected to grow at a constant rate of 6 percent a year. What stock price is expected 1 year from now? What is the required rate of return?

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    Solution Summary

    The solution analyzes constant growth valuations for Harrison Clothiers stock. The stock price expected 1 year from now is determined as well as the required rate of return.