Question: Chapter 9 Q 8 A stock is expected to pay a dividend of $2.00 at the end of the year (i.e., D 1 = $2.00),

Chapter 9 Q 8

A stock is expected to pay a dividend of $2.00 at the end of the year (i.e., D₁ = $2.00), and it should continue to grow at a constant rate of 5% a year. If its required return is 15%, what is the stock's expected price 1 year from today? Do not round intermediate calculations. Round your answer to the nearest cent.

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