Holtzman Clothierss stock currently sells for $38 00 a share It just paid a dividend of $2 00 a share (i e , D 0 $2 00) The dividend is expected to grow at a constant rate of 5 a year What stock price is expected 1 year from now What is the required rate of return ...

Holtzman Clothierss stock currently sells for $38.00 a share. It just paid a dividend of $2.00 a

Question:

Holtzman Clothiers’s stock currently sells for $38.00 a share. It just paid a dividend of $2.00 a share (i.e., D₀ = $2 00). The dividend is expected to grow at a constant rate of 5% a year. What stock price is expected 1 year from now? What is the required rate of return?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...