Sorenson Corp.'s expected year-end dividend is D1 = $1.60, its required return is rS = 11.00%, its

Question:

Sorenson Corp.'s expected year-end dividend is D1 = $1.60, its required return is rS = 11.00%, its dividend yield is 6.00%, and its growth rate is expected to be constant in the future. What is Sorenson's expected stock price in 7 years, i.e., what is P7?

a. $37.52

b. $39.40

d. $43.44

e. $45.61

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...