Dividends are expected to grow at a constant rate

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Reference no: EM13950710

Sun Investment Inc. current stock price is $450 and its last dividend was $8.00. In view of Sun’s strong financial position and its consequent low risk, its required rate of return is 6%. If dividends are expected to grow at a constant rate, g, in the future and r is expected to remain at 6%, what do you forecast Sun’s stock price to be 3 years from now? FORMAT TO 4 DECIMAL PLACES *HINT: find the growth rate first

A. $492.22

B. $400.55

C. $450.38

D. $488.54

E. $350.97

Reference no: EM13950710

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