According to your research, the growth rate in dividends for JC Penney for the next three years is expected to be 10 percent. Suppose JC Penney meets this growth rate in dividends for the next three years and then the dividend growth rate falls to 4 percent indefinitely. Assume investors require a return rate of 14 percent on JC Penney Stock.

According to the dividend growth model, what should the stock price be today?

Using the close price, what should be your decision on JC Penney? Buy or Not Buy? Why?

5. You've collected the following information from your avorite tmaltial weoslle 52-Week Price Div PE Ratio Close Price Hi 32.90 194.90 41.86 Lo 42.81 151.71 23.44 Net Chg 14.2 41.60 -0.31 1.91 0.35 Stock (Div) Yld % Laclede Grp 1.66 4.0 1.6 JC Penney 0.801.9 IBM 3.00 14.7 192.37 45.8 41.77