Question
A stock market analyst, just released a report saying that he believes that a particular companys stock will reach a price of $87.00 in two
A stock market analyst, just released a report saying that he believes that a particular companys stock will reach a price of $87.00 in two years. You have also gone through this companys recent accounting statements, and youve estimated that its earnings will be sufficient to pay dividends of $9 per share next year, and $13 per share two years from now. Based on these estimates, if the stock has a 15% required return (discount rate) what would be willing to pay today for a share of the companys stock?
A. $83.44 B. $93.31 C. $94.49 D. $94.78 E. $95.96 F. $160.28
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