Answer:
10.34
Explanation:
This question refers to Dividend Growth Rate with respect to Stock valuation
The model estimates the dividends over a defined period based on an assumed growth rate to determine the future value of the stock.
The formular to calculating the expected value is as follows
[tex]\frac{Dividend Amount(1+Rate)^{Years} }{Expected Return - Rate}[/tex]
Please note:
Expected return and Rate are expressed in percentage i.e divided by 100.
Fitting into the formular:
[tex]\frac{1.15(1+0.0075)^{5} }{0.123 - 0.0075}[/tex]
The resulting answer = 10.34
