from Parrino, R., Kidwell, D. S., & Bates, T. (2012). Fundamentals of Corporate Finance, 2nd edition. John Wiley & Sons.

ABC company is growing at a constant rate of 7 percent every year. Last week the company paid a dividend of $1.8. If dividends are expected to grow at the same rate as the fi rm and the required rate of return is 12 percent, what should be the stocks price four years from now? (2.5 Marks)