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You are considering investment in the common stock of Cowher Corp. The stock is expected to pay a dividend of $4.20 per share at the
You are considering investment in the common stock of Cowher Corp. The stock is expected to pay a dividend of $4.20 per share at the end of the year (i.e. D = $4.20). The required rate of return for the l stock is 12 percent. The stock's dividend is expected to grow at some constant rate, g. The stock currently sells for $60 a share. Assuming the market is in equilibrium, what does the market believe the stock price will be at the end of year? (In other words, what is P?)
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