A Stock Price Prediction with Dividend Discount Model

What is the expected price of a stock in one year if it is currently priced at $58.37 and expected to pay a dividend of $1.32 with a return of 9.62%?

The expected price of the stock in one year is approximately $59.82.

Calculation Using Dividend Discount Model

The expected price of a stock in one year can be calculated using the Dividend Discount Model (DDM) formula. The formula is:

Expected Price = Current Price + Dividend * (1 + Return)

Given:

Current Price = $58.37

Dividend = $1.32

Return = 9.62% or 0.0962

Plugging in the values, we get:

Expected Price = $58.37 + $1.32 * (1 + 0.0962)

Expected Price = $58.37 + $1.32 * 1.0962

Expected Price = $58.37 + $1.448944

Expected Price = $59.82

Therefore, based on the given data, the expected price of the stock in one year is approximately $59.82.