The current price of a stock is $99. If dividends are expected to be $1.5 per share for the next six years, and the required return is 15%, then what should the price of the stock be in 6 years when you plan to sell it? If the dividend and required return remain the same, and the stock price is expected to increase by $1 six years from now, does the current stock price also increase by $0.5? Why or why not?

Answer rating: 100% (QA)

To calculate the price of the stock in 6 years we can use the dividend discount model DDM formula P ... View the full answer