One investor is considering to purchase share of ABC stock and holding it for 4 years. Assume that the investor's required rate of return is 10 percent. Dividends from the stock are expected to be $4 in the first year, $4 in the second year, $5 in the third year and $5 in the fourth year. The expected selling price of the stock at the end of 4 years is $50. What is the value of this stock?(3 Marks)

Formula

P0= D1/(1+ke) + D2/(1+ke)2+... Dn/(1+ke)n+ Pn/(1+ke)n