Answer: Rylan's stock would sell for $21.96 at the end of the four years
Explanation:
PV = Current Price = $31.27
D = Dividend paid each year =$5.70
r = Equity cost of capital = 12%
FV = Price of Rylan's stock at the end of four years = ??
N = Number of years = 4
PV = D +
31.27 = 5.70 +
Solve for FV,
FV = $21.96
Rylan's stock would sell for $21.96 at the end of the four years