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30 July, 02:16

Holtzman Clothiers's stock currently sells for $18 a share. It just paid a dividend of $3.5 a share (i. e., D0 = $3.5). The dividend is expected to grow at a constant rate of 6% a year. What stock price is expected 1 year from now? Round your answer to two decimal places.

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  1. 30 July, 02:31
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    Stock Price After 1 year = $19.08

    Explanation:

    The question is to determine the stock Price for one year for Holtzman Clothier

    First we decide what the formula is as follows

    Stock Price after 1 year = The Current Price of Stock x (1 + Growth Rate)

    The Current Stock Price = $18 a share

    The Grwoth Rate = 6% a year

    Based, on these given figures, we plug them into the formula as follows

    Stock Price After 1 year = $18 x (1 + 6%)

    Stock Price After 1 year = $18 x (1.06)

    Stock Price After 1 year = $19.08
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