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Always Bull Inc. (AB) just paid a $1.20 per share annual dividend. The company is planning on paying the dividends of $1.50, $1.70, $1.90 a

Always Bull Inc. (AB) just paid a $1.20 per share annual dividend. The company is planning on paying the dividends of $1.50, $1.70, $1.90 a share over the next 3 years, respectively. After year 3, the dividend will be a constant $2.10 per share per year.

  1. What is the price of AB stock today if the required return on similar stock with the same level of risk is 9%?
  2. What would be the price of AB with the same required return as in 1, if the dividend increases with 3% constant annual growth from year 4 onwards?
  3. How can we find out the required return of the AB stock?

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