Chapter 7 Question 6 Please answer the following questions below (see image) Assume Highline Company has just paid an annual dividend of $1 02 Analysts are predicting an 11 8 per year growth rate in earnings over the next five years After then, Highline's earnings are expected to grow at the current industry average of 5 1 per year If Highline's equity cost of capital is 7 7 per year and its dividend payout ratio remains constant, for what price does the dividend discount model predict Highline stock should sell Assume Highline Company has just paid an annual dividend of $1 02 Analysts are predicting an 11 8 per year growth rate in earnings over the next five years After then, Highline's earnings are expected to grow at the current industry average of 5 1 per year If Highline's equity cost of capital is 7 7 per year and its dividend payout ratio remains constant, for what price does the dividend discount model predict Highline stock should sell The value of Highline's stock is $ (Round to the nearest cent )

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Chapter 7 | Question 6: Please answer the following questions below (see image): Assume Highline Company has just paid an annual dividend of $1.02. Analysts

Chapter 7 | Question 6: Please answer the following questions below (see image):

Assume Highline Company has just paid an annual dividend of

$1.02.

Analysts are predicting an

11.8%

per year growth rate in earnings over the next five years. After then, Highline's earnings are expected to grow at the current industry average of

5.1%

per year. If Highline's equity cost of capital is

7.7%

per year and its dividend payout ratio remains constant, for what price does the dividend-discount model predict Highline stock should sell?

image text in transcribed

Assume Highline Company has just paid an annual dividend of $1.02. Analysts are predicting an 11.8% per year growth rate in earnings over the next five years. After then, Highline's earnings are expected to grow at the current industry average of 5.1% per year. If Highline's equity cost of capital is 7.7% per year and its dividend payout ratio remains constant, for what price does the dividend-discount model predict Highline stock should sell? The value of Highline's stock is $ (Round to the nearest cent.)