Final answer:
The future price of Frazier Enterprises stock, factoring in a dividend of $4 and a capital gains yield of 10%, is calculated to be $53.50 one year from now.
Step-by-step explanation:
To calculate the future price of Frazier Enterprises stock, we consider the expected dividend and the capital gains yield. Given that the current stock price is $45, the expected dividend next year is $4, and the capital gains yield is expected to be 10%, we can estimate the future stock price. The capital gains yield indicates how much the stock price is expected to increase, in percentage terms, due to the appreciation of the stock's value.
The calculation is as follows:
Future stock price = Current stock price + (Capital gains yield × Current stock price) + Dividend
Future stock price = $45 + ($45 × 0.10) + $4
Future stock price = $45 + $4.5 + $4
Future stock price = $53.50
Therefore, one year from now, the price of Frazier Enterprises stock is expected to be $53.50.