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James Smith co. last dividend was $3.55. The company expects to grow at a constant rate of 5%. Your required rate of return on such

James Smith co. last dividend was $3.55. The company expects to grow at a constant rate of 5%. Your required rate of return on such shares is 6.5%.

a. Find the current market value of this share.

b. What are the expected dividends in year 5?

c. What is the price of the share 8 years from now?

d. If the company expects no growth in the near future, what is the maximum price you would be willing to pay?

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