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DIY Inc. will pay a dividend of $10 per share in year 1. The dividend is expected to grow at 7% per year for 26
DIY Inc. will pay a dividend of $10 per share in year 1. The dividend is expected to grow at 7% per year for 26 years. After that, DIY will repeat the following dividend policy forever: increase dividend by $9 for one year and then decrease dividend by $6 for another year (i.e., DIY will increase dividend by $9 in year 28, decrease by $6 in year 29, increase by $9 in year 30, decrease by $6 in year 31, ....). Investors require 12% return on the stock. Calculate the shock price today.
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