Finance 3030 Question from Assignment #1

Please answer the following Question.

The QuickFixCompany just paid a dividend of $1.25 and analysts expect the dividend to grow at its compound average growth rate of 10.72% forever. If you plan on holding the stock for just 7 years, and you have an expected rate of return of 14%, how much would you pay for the stock? Assume that the next owner also expects to earn 14% on his or her investment.

PLEASE SHOW ANSWER ONLY USING THE CALCULATOR. SHOW THE WORK IN THE FORM OF THE CALCULATION FUNCTIONS THAT WERE USED AND THE NUMBERS THAT WERE INPUTED. EXPLAIN WHY EACH STEP WAS DONE.