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For stock C, dividends in years 6, 7, 8 , 9 and so on are 12.44. Since constant no growth begins in year 6, you
For stock C, dividends in years 6, 7, 8 , 9 and so on are 12.44. Since constant no growth begins in year 6, you can place your horizon, value in year 5. Thus, the price today is the present value of dividends 1 through 5 plus the present value of the horizon value in year 5. For calculator purposes, add horizon value 5 to dividend 5 and enter the sum as cash flow 5.
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