Business, 23.04.2020 15:48, honeysenpai6

Lucky Dragon, Inc. has an attractive investment opportunity with return (return on new investment) equals 16% forever. The required return from Lucky Dragon shareholders is 10%. Its expected earnings at the end of this year are $8 per share (EPS_1 = $8). However, the investors require that Lucky Dragon. Inc. distributes 75% of its earnings as dividends every year.

a. What is the stock price of Lucky Dragon. Inc. today?
b. What is its expected stock price one year from now?

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Lucky Dragon, Inc. has an attractive investment opportunity with return (return on new investment) e...