Fey Fashions expects the following dividend pattern over the next sevenyears: Year 1 Year 2 Year 3
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Question:
Fey Fashions expects the following dividend pattern over the next sevenyears:
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | |
| $1.10 | $1.19 | $1.29 | $1.39 | $1.50 | $1.62 | $1.75 |
The company will then have a constant dividend of$1.90forever. What is thestock'sprice today if an investor wants to earn a. 16%? b. 20%?
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