Darnell

One of the options is Delta Airlines. They have paid an annual dividend of $$5\mathrm{.}06$ for the past $25$ years and we expect them to continue this indefinitely. Assuming the market requires a$($n$)14\mathrm{.}1\%$ return from Delta, what is the value of a share of stock? $($Hint: Round intermediate calculations and answer to $2$ decimal places$)$

$$35\mathrm{.}89$

Darnell

And what if we assumed they would start increasing their dividend by $4\mathrm{.}1\%$ per year? What would be a fair price to pay in that scenario? $($Hint: Round intermediate calculations and answer to $2$ decimal places$)$