# What is the expected stock price of Pablo's Pizza one year from now?

Not what you're looking for? Search our solutions OR ask your own Custom question.

Pablo's Pizza International Inc.'s common stock currently sells for $20 per share. The stock

has just paid an annual dividend of $1.00 (D0 = $1.00). The dividend is expected to grow at a constant rate of 10% per year. (Pr. 10-3)

a. Calculate the stock price expected 1 year from now.

b. Calculate the required rate of return on PPI's common stock.

SHOW ALL WORK.

Â© BrainMass Inc. brainmass.com December 24, 2021, 4:50 pm ad1c9bdddfhttps://brainmass.com/business/finance/what-is-the-expected-stock-price-of-pablo-s-pizza-one-year-from-now-10327

#### Solution Preview

a. Calculate the stock price expected 1 year from now.

D1=D0*(1+g)=1*(1+0.1)=$1.10

Or you can calculate it by a TI BA II Plus:

N=1, ...

#### Solution Summary

This solution shows step-by-step calculations for stock price as well as the steps for solving this using the mentioned financial calculator.

$2.49