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Financial Technology Corp. is expected to pay a dividend of S3.30 today but dividends are expected to grow at 5% per year going forward. The
Financial Technology Corp. is expected to pay a dividend of S3.30 today but dividends are expected to grow at 5% per year going forward. The required return is 9%. What is the price expected to be in year 3? (15 points) Suppose a firm is expected to increase dividends by 10% in one year and by 15% in two years. After that, dividends will increase at a rate of 6% per year indefinitely. If the current dividend is $1.05 and the required return is 7.5%, what is the price ofthe stock? (20 points)
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