Connolly Co.'s expected year-end dividend is D₁ = $1.60,its required return is r_s = 11.00%,its dividend yield is 6.00%,and its growth rate is expected to be constant in the future.What is Connolly's expected stock price in 7 years,i.e.,what is $\hat { \mathrm { P } } _ { 7 }$ ?

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Next expected dividend $ =\mathrm{D}_{1}= $ &emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp;$ \$ 1.60 $
Required return &emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp; &emsp;&emsp;&emsp;$11.0 \% $
Dividend yield $ =\mathrm{D}_{1} / \mathrm{P}_{0}= $ &emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp;$6.0 \% $
Find the growth rate: $ g=r_{s}- $ yield $ = $ &emsp;&emsp;&emsp;&emsp;$5.0 \% $
Find $ P_{0}=D_{1} /\left(r_{s}-g\right)= $ &emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp;$ \$ 26.67 $
Years in the future &emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp; &emsp;$7 $
$ \hat{\mathrm{P}}_{7}=\mathrm{P}_{0}(1+\mathrm{g})^{7} $ &emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp;&emsp; $ \$ 37.52 $

Connolly Co P^7\hat { \mathrm { P } } _ { 7 }P^7​

Connolly Co $\hat { \mathrm { P } } _ { 7 }$