Question

Marble Books, Inc., is expected to pay an annual dividend of $1.80 per share next year. The required return is 16 percent and the growth rate is 4 percent. What is the expected value of this stock five years from now

Answer 1

$18.25

Step-by-step explanation:

Calculation to determine the expected value of this stock five years from now

Expected value= 2.19/(0.16-0.04)

Expected value= 2.19/0.12

Expected value =$18.25

Therefore the expected value of this stock five years from now is $18.25