Step 3: Present value of future stock price Step 4: Present value of stock Solving for step 4, what would Bob Katz be willing to pay (approximately) for the stock? $72.33 $70.51 $74.19 $68.71 Bob Katz is interested in the following stock: - current dividend is $3.50 - projected three year growth rate of 13% - growth rate after year 3 is expected to fall and remain constant at 6% - Bob's required return is 12% Step 1: Present value of Dividends 5 De FVIF Dt PVIF PVdiv 1 2 3 Step 2: Future value of stock price Step 3: Present value of future stock price