Plastic Pretzels stock recently paid a dividend of $1.39 per share. The dividend growth rate is expected to be 3.60% indefinitely. Stockholders require a return of 11.60% on this stock. a. What is the current intrinsic value of Plastic Pretzels stock? (Round your answer to 2 decimal places.)
Intrinsic Value:
b. What would you expect the price of this stock to be in one year if its current price is equal to its intrinsic value? (Round your answer to 4 decimal places.)
Expected Price:
c. If you were to buy Plastic Pretzels stock now and sell it after receiving the dividend one year from now, what would be your holding period return (HPR) ? (Round your answer to 2 decimal places.)
HPR: __.
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