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Kelly Enterprises' stock currently sells for $35.25 per share. The dividend is projected to increase at a constant rate of 4.75% per year. The required rate of return on the stock, r s, is 11.50%. What is the stock's expected price 5 years from now?

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ijaz4308

Answer:

$44.46

Explanation:

The Price of Kelly Enterprises stock after five years can be determined through below mentioned formula:

F=P(1+g)^n

In this question:

F=Price of Kelly Enterprises' stock after five years

P=Current price of Kelly Enterprises' stock=$35.25

g=growth rate=4.75%

n=Years involved=five years

F=35.25(1+4.75%)^5

F=$44.46

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