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Rework Table 7.4 for horizon years 1, 2, 3, and 10, assuming that investors expect the dividend and the stock price to increase at only
Rework Table 7.4 for horizon years 1, 2, 3, and 10, assuming that investors expect the dividend and the stock price to increase at only 6% a year and that each investor requires the same 12% expected return. The company will pay a dividend of $3 at the end of the first year. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Horizon (years) 1 2 3 10 PV (Dividends) PV (Terminal Price) Value per Share TABLE 7.4 Value of Blue Skies Horizon (years) 2 3 10 20 30 50 100 PV (dividends) $2.68 5.26 7.75 22.87 38.76 49.81 62.83 73.02 + PV (terminal price) $72.32 69.74 67.25 52.13 36.24 25.19 12.17 1.98 200 57575755 5 75 75 = Value per Share 75
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