Bradley Corp. is growing at a constant rate of 7.2 percent every year. Last week the company

Question:

Bradley Corp. is growing at a constant rate of 7.2 percent every year. Last week the company paid a dividend of $1.85. If dividends are expected to grow at the same rate as the firm and the required rate of return is 15 percent, what should be the stock’s price four years from now?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...