What price do you forecast for the stock one year from now

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Reference no: EM13919374

Horse and Buggy Inc. is in a declining industry. Sales, earnings, and dividends are all shrinking at a rate of 15% per year.

a. If r = 20% and DIV1 = $7, what is the price of a share? (Do not round intermediate calculations.)

b. What price do you forecast for the stock one year from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

c. What is the cost of capital on the stock? (Do not round intermediate calculations.)

Reference no: EM13919374

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