S Corp
Subject:FinancePrice:2.86 Bought8
S Corp.'s stock currently sells for $30.75 per share. The dividend is projected to increase at a constant rate of 4.5% per year. What is the stock's expected price 5 years from now? a. $40.04 b. $45.70 c. $38.32 d. $43.73 O e. $47.80
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Please find the answer below.
Statement showing computation:
Current price= $30.75
Growth=4.5%
Price after 5 years= Current price*(1+growth)^5
Price after 5 years= 30.75*(1+0.045)^5
Price after 5 years= 30.75*1.24618194
Price after 5 years= $38.32
So correct answer is c)$38.32
