FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Holtzman Clothiers's stock currently sells for $16.00 a share. It just paid a dividend of $2.25 a share (i.e., D0 = $2.25). The dividend is expected to grow at a constant rate of 5% a year.
What stock price is expected 1 year from now? Round your answer to the nearest cent
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Step 1
The board of directors of a firm determines the amount of dividend which are required to be distributed to the shareholders, which requires shareholder approval.
Out of the profit earned by the business organizations, some of the profit is distributed to the shareholders as return in the form of dividend and the remaining profit is retained by the entities for further growth and expansions.
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