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Currently (year 0) a stock is paying a dividend of $10. You expect dividends to grow at a rate of 5 percent per year for
Currently (year 0) a stock is paying a dividend of $10. You expect dividends to grow at a rate of 5 percent per year for the next 100 years. You also expect the price of this stock in year 100 to be $100. This stock is somewhat risky and you require a rate of return of k = 0.25 from this stock. According to the Gordon formula, you are willing to pay __________________ dollars for it today.
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