Question

Assume Highline Company has just paid an annual dividend of

$ 1.09$1.09.

Analysts are predicting an

10.3 %10.3%

per year growth rate in earnings over the next five years. After​ then, Highline's earnings are expected to grow at the current industry average of

5.4 %5.4%

per year. If​ Highline's equity cost of capital is

7.6 %7.6%

per year and its dividend payout ratio remains​ constant, for what price does the​ dividend-discount model predict Highline stock should​ sell?

The value of​ Highline's stock is

​$nothing.

​(Round to the nearest​ cent.)

Answer 1

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