Woidtke Manufacturings stock currently sells for $20 a share The stock just paid a dividend of $1 00 a share (i e , D0 $1 00), and the dividend is expected to grow forever at a constant rate of 10 a year What stock price is expected 1 year from now What is the required rate of return on Woidtkes st...

Woidtke Manufacturings stock currently sells for $20 a share. The stock just paid a dividend of $1.00

Question:

Woidtke Manufacturing’s stock currently sells for $20 a share. The stock just paid a of $1.00 a share (i.e., D0 = $1.00), and the is expected to grow forever at a constant rate of 10% a year. What stock price is expected 1 year from now? What is the required rate of return on Woidtke’s stock?

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...