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Madison River Fishing, Inc. (MRFI) stock has the following forecasted dividend-per share stream: $1.38 at the end of each of years 1 through 10 and
Madison River Fishing, Inc. (MRFI) stock has the following forecasted dividend-per share stream: $1.38 at the end of each of years 1 through 10 and $1.80 at the end of year 11, after which dividends are expected to grow by 2% per year, forever. Using a required return of 14%, calculate a fair price for MRFIs stock today. (3 pts.) (b) Based on the forecasted dividend stream, calculate what MRFIs stock price should be 15 years from now, instantaneously after Div15 is paid.
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