Bob Katz is interested in the following stock: - current dividend is $2.50 - projected three year growth rate of 11% - growth rate after year 3 is expected to fall and remain constant at 6% - Bob's required return is 12% Step 1: Present value of Dividends Do FVIF Dt PVIF PVdiv Step 2: Future value of stock price Step 4: Present value of stock Solving for step 4, what would Bob Katz be willing to pay (approximately) for the stock? Solving for step 4, what would Bob Katz be willing to pay (approximately) for stock? $49.13 $50.36 $51.67 $53.00