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Suppose Target Corporation plans to pay $0.68 per share in dividends in the coming year. a. If its equity cost of capital is 10% and

Suppose Target Corporation plans to pay $0.68 per share in dividends in the coming year.

a. If its equity cost of capital is 10% and dividends are expected to grow by 8.4% per year in the future, estimate the value of Targets stock.

b. If its equity cost of capital is 10% and dividends are expected to stay constant for the next 3 years due to the pandemic and will grow by 8.4% per year forever starting in year 4, estimate the value of Targets stock.

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