Intro

Net income for the previous year was $$400,000,$ of which $$230,000$ was paid out in

dividends. Dividends are expected to grow at a constant rate. The company has

$200,000$ shares outstanding and the book value of equity is $$2,000,000.$ The

appropriate P$/$E ratio for this type of company is $13.$

Part $1$

What is the expected stock price $5$ years from now?