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20. Suppose today is Dec 31st 2021, and you are considering purchasing Intel stock. Intel will pay a dividend of $1.60 per year for the
20. Suppose today is Dec 31st 2021, and you are considering purchasing Intel stock. Intel will pay a dividend of $1.60 per year for the next two years: thereafter, the company pledges to maintain a constant 7% growth rate in dividends forever. Suppose the required rate of return is 15%. How mach would you pay for Intel's stock today? Hink: 1. Draw the timetine correctly. 2. First, calculate the expected pice at vear 2, which incorporates the value of all future dividends. Then, use the pricing formula to get Intefs stock price today. A. $1667 ? 8 $1772 C. $1978 D. $20 E. $2140
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