$10-5$: Constant Growth Stocks

Valuation of a constant growth stock

A stock is expected to pay a dividend of $$2\mathrm{.}75$ the end of the year $($that is$,D_1=$$$2\mathrm{.}75),$ and it should continue to grow at a constant rate of $6\%$ a year. If its

required return is $14\%,$ what is the stock's expected price $5$ years from today? Round your answer to two decimal places.

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