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Suppose Lane and Company stock just paid a $6 dividend that is expected to grow by 6% for three years and then by 2% thereafter.

Suppose Lane and Company stock just paid a $6 dividend that is expected to grow by 6% for three years and then by 2% thereafter. Lanes bonds are yielding 3%. The Beta of Lane stock is .90 and T-Bills are yielding 1%. What should be the price of Lane stock?

Select one:

a. $202.00

b. $200.00

c. $162.16

d. Not enough information is given to solve this problem

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