Problem 8-1 Stock Values [LO1]

The RLX Company just paid a dividend of $1.95 per share on its stock. The dividends are expected to grow at a constant rate of 3 percent per year indefinitely. Investors require a return of 11 percent on the company's stock.

a. What is the current stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

b. What will the stock price be in 3 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

c. What will the stock price be in 6 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)