A share of stock has a dividend that is expected to grow at a constant...
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Finance
A share of stock has a dividend that is expected to grow at a constant perpetual rate. During the next year (t=0 to t=1), the dividend yield is expected to be 8.45%. The capital gains yield for the next year is expected to be 3.6%. Dividends are paid at years end. If the dividend paid at the end of the year (at t=1) is expected to be $6.49, what is a fair price for the stock in exactly 6 years from today?
Hello, my answer (to the above) differed from the professors. The correct answer is 94.96 - can you help me see how they got to this answer?
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