12. Problem 9.11 (Valuation of a Constant Growth Stock)

eBookProblem Walk-Through

A stock is expected to pay a dividend of $0.50 at the end of the year (i.e., D₁ = $0.50), and it should continue to grow at a constant rate of 4% a year. If its required return is 13%, what is the stock's expected price 3 years from today? Do not round intermediate calculations. Round your answer to the nearest cent.

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