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 $1.20 at the end of the first year.

What value would an investor place on the stock?

Note: Do not round intermediate calculations. Round your answers to 2 decimal places.

Horizon (years) PV (dividends) PV (Terminal Price) Value Per Share

1

2

3

10

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 $1.20 at the end of the first year. Horizon (years) 1 2 3 10 PV (dividends) PV (Terminal Price) Value per Share What value would an investor place on the stock? TABLE 7.4 Value of Blue Skies. Horizon (years) PV (dividends) PV (terminal price) Value per Share 1 $2.68 $72.32 $75 2 5.26 69.74 75 3 7.75 67.25 75 10 22.87 52.13 75 20 38.76 36.24 75 30 49.81 25.19 75 50 62.83 12.17 75 100 73.02 1.98 75