In: Finance
Melissa Popp is thinking about buying some shares of R.H. Lawncare Equipment, at $ 52.24 per share. She expects the price of the stock to rise to $ 69.68 over the next 3 years. During that time she also expects to receive annual dividends of $ 3.44 per share. a. What is the intrinsic worth of this stock, given a required rate of return of 9 %? b. What is its expected return?