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In one year, IBM will give a 2 dollars annual dividend. In the second year, the dividend will be 3 dollars. Dividends for year 3
In one year, IBM will give a 2 dollars annual dividend. In the second year, the dividend will be 3 dollars. Dividends for year 3 and 4 will be $5 and $3.5 respectively. After that the dividends will grow at a constant growth rate of 2% per year forever. If the return for assets with a similar amount of risk to IBM is 10%, what is the stock price of IBM today?
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